John Lothian Newsletter: CME Group Says It Will Reduce Grain Futures' Trading Hours; Nasdaq combines global data and index businesses; Currency Shifts Spark a Revival for Market

Jan 30, 2013

The evolution of the US grain market continues, as CME Group now says that after talking to customers again, it’d be best to reduce grain trading hours after all. Nasdaq continues to re-pack its business units, this time restructuring its global data and index products into the same box. Currency markets, after posting a miserable 2012 for trading volume, continue to show a healthy rebound as volatility and other factors bring the traders back.

First Read

New Restoring Customer Confidence Video
The ninth video in our Restoring Customer Confidence series deals with securing segregated funds. Each week we will post a new idea answering the question – how do you restore customer confidence and bring traders back?

Restoring Customer Confidence More ideas»
Customer Segregation: Keep It Separate

Customer Segregation: Keep It Separate
MarketsWiki.tv

There has been much talk about protecting customer funds but keeping them in segregated accounts outside of the brokerage house. John Omahen, vice president of post trade derivatives solutions at SunGard, talks about the value in moving customer funds to a clearing house. Such segregation could help not only protect customer funds, but also could create lower financing costs.

Watch the video »

Also see — Customer Segregation: A Clear View

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About the Restoring Customer Confidence video series
In the aftermath of the MF Global collapse, fraud at Peregrine Financial Group and high profile high-frequency trading shocks, John Lothian News asks – how do you restore customer confidence and bring traders back? Previous videos:

Visit the video series page on MarketsWiki.tv over the next several weeks for new ideas and solutions.

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ICE Lobbies for NYSE Deal – WSJ.com
JACOB BUNGE and MICHELLE PRICE
The next step in IntercontinentalExchange Inc.‘s proposed $8.2 billion takeover of NYSE Euronext: running a gantlet of regulators and policy makers that already have curbed recent industry consolidation.
jlne.ws/X7OuxD

**JK – ICEing on the cake?

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Investors warm to futures as clearing looms
Tom Osborn – Financial News
Half of global institutional investors plan to increase their use of futures contracts at the expense of the over-the-counter derivatives market, in the wake of regulations that will make it more costly to trade swap contracts, according to a survey by UBS.
jlne.ws/T6GnVO

**JK – CME told me the other day that 90 percent of the swaps it had been running through ClearPort, are now being traded on Globex as futures.

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Thomson Reuters rolls out Eikon upgrade
Philip Stafford in London and Andrew Edgecliffe-Johnson in New York – FT.com
Thomson Reuters, the financial information group, is this week rolling out a big upgrade to Eikon, the high-profile data and trading platform that struggled at its 2010 launch, in an effort to win back market share.
jlne.ws/X7OuxF

**JK – No word on whether Bill Ackman will take the other side of this deal. (Yes, very bad Icahn pun)

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New US rules to decide fate of noisy swap brokers
Douwe Miedema – Reuters
Twenty casually clad men crowd around a screen at derivatives broker GFI, shouting prices at each other and to clients on the phone.
jlne.ws/14qu0Gy

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MF Global’s Bankruptcy Closes In on Happy Conclusion
BEN PROTESS – NYTimes.com
When Mahesh Desai checked his MF Global account 15 months ago, his $580,000 nest egg was gone. Like thousands of investors and farmers who had their savings with MF Global, Mr. Desai lost his money in the brokerage firm’s chaotic final days. Regulators discovered that $1.6 billion was trapped in a web of improper wire transfers, a stunning breach that sent federal investigators scrambling to build a case.
jlne.ws/X7OuxL

**JK – Happy is an overstatement, but yes customers are getting most of their money back. The vindication of Corzine bit, not so much.

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Lessons for Entrepreneurs in Rubble of a Collapsed Deal
STEVEN M. DAVIDOFF – NYTimes.com
One lesson to be learned from Goldman Sachs’s victory in a legal dispute over its role as the adviser in the sale of the speech recognition company Dragon Systems may be an old one. If you don’t know who the chump is, then you’re probably it.
jlne.ws/X7OuO0

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DealBook: Top Federal Prosecutor of Corporate Crime Will Resign
New York Times
Lanny A. Breuer, the federal prosecutor who led the Justice Department’s response to corporate crime in the wake of the financial crisis, will announce on Wednesday that he is stepping down after nearly four years in the post.
jlne.ws/X7OuO1

**JK – Wall Street has given him a gold watch. Nice job Lanny, way to get em.

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A perilous journey to full recovery
Martin Wolf – FT.com
“We have avoided collapse, but we need to guard against any relapse. 2013 will be a make-or-break year.” These were the words of Christine Lagarde, managing director of the International Monetary Fund, at the World Economic Forum last week. She was right.
jlne.ws/X7OuO2

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Swiss banks lose old taste for gold
Jack Farchy, Commodities Correspondent – FT.com
The wealthy have for centuries turned to Switzerland as a safe and convenient place to stash their gold. But Swiss banks are now demanding higher fees to accept the world’s bullion, as they seek to reduce the size of their balance sheets.
jlne.ws/X7OuO5

**JK – Cappuccinos in Zurich just aren’t as good without the Swiss gold anymore

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MarketsWiki

MarketsWiki Page of the Day
Standard & Poor’s Depositary Receipts
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MarketsWiki Recent Updates

People

John Omahen; Linda Dallas Rich; Nate Most; Kathleen Moriarty; Craig Reilly

Companies, Organizations and Groups

SunGard Data Systems; CME Group, Inc.; Securities Investor Protection Corporation; StockTwits; ConvergEx

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Lead Stories

CME Group Says It Will Reduce Grain Futures’ Trading Hours
Ian Berry and Jacob Bunge – Dow Jones Newswires
CME Group Inc. (CME) will cut the number of hours its grain futures are traded in response to industry feedback, the exchange announced Tuesday. The exchange, which is in the midst of surveying customers on trading hours, said that while the survey isn’t complete, it has already received enough responses to reduce hours for grain and soybean futures, pending approval from the Commodity Futures Trading Commission.
jlne.ws/X7OxcM

Nasdaq combines global data and index businesses
Reuters
Nasdaq OMX Group Inc said on Tuesday it was combining its global data and index businesses as the trans-Atlantic exchange operator continues to reposition itself to be a bigger player in technology services, a move aimed at boosting non-transaction-based revenues.
jlne.ws/X7OxcP

Currency Shifts Spark a Revival for Market
STEPHEN L. BERNARD and CLARE CONNAGHAN – WSJ.com
Foreign-exchange trading is roaring back from one of the sharpest slowdowns since the financial crisis, some of the market’s biggest traders say.
jlne.ws/X7OxcV

Post-Lehman, the push for global financial protections stalls
Washington Post
Five years after the collapse of Lehman Brothers, a global push to tighten financial regulation around the world has slowed in the face of a tepid recovery and a tough industry lobbying effort.
jlne.ws/X7OuOe

Fed’s Long-Running Show Goes On and On
SPENCER JAKAB – WSJ.com
Move along folks, nothing to see here. Meetings of the Federal Reserve’s rate-setting committee haven’t merely taken top billing in markets the past few years, they have shoved nearly everyone else off the stage. Given the Fed’s latest bond-buying plan has lit a fire under markets lately, its meeting concluding Wednesday normally would be a doozy.
jlne.ws/X7Oxtd

Brussels softens line on bank ringfences
Patrick Jenkins in London – FT.com
The European commissioner in charge of regulatory reform of the region’s banks has signalled a retreat from plans to force lenders to build barriers around their securities trading operations, as policy makers focus on stimulating growth.
jlne.ws/X7OuOi

Central banks walk inflation’s razor edge
Charles Goodhart – FT.com
The exteriors of major central banks may be solid marble and doric columns, but inside, monetary policy remains a work in progress. Those inside have to craft a policy framework that makes the most efficient use of instruments of varying potential effectiveness and show responsiveness, but not subservience, to external political pressures.
jlne.ws/X7Ov4y

Regulatory

SEC’s Gallagher takes issue with disclosure rules
Market Watch
WASHINGTON – Two disclosure rules required by the Dodd-Frank Act are costly and appear to be set up to affect the behavior of companies rather than provide useful information to investors, a top Securities and Exchange Commission official said Tuesday.
jlne.ws/X7Ov4A

SEC Names Carl W. Hoecker As Inspector General
The Securities and Exchange Commission today announced that it has named Carl W. Hoecker as its Inspector General. Mr. Hoecker currently serves as Inspector General for the U.S. Capitol Police and will replace David Kotz, who left the SEC last year.
jlne.ws/X7Oxth

CFTC Staff to Host a Public Roundtable to Discuss Proposed Rulemaking Enhancing Protections Afforded Customers and Funds Deposited by Customers
The Commodity Futures Trading Commission (CFTC) today announced that staff will hold a public roundtable on Tuesday, February 5, 2013, from 9:30 a.m. to 5:00 p.m., to discuss the Commission’s proposed rulemaking, “Enhancing Protections Afforded Customers and Customer Funds Held by Futures Commission Merchants and Derivatives Clearing Organizations,” which was published for public comment on November 14, 2012.
jlne.ws/X7Ov4E

SEC Will Probably Bring More Mortgage-Bond Cases, Muoio Says
Bloomberg
The U.S. Securities and Exchange Commission is likely to continue filing cases tied to residential-mortgage-backed securities, said Reid Muoio, deputy head of its structured and new products unit.
jlne.ws/X7Oxtk

[Japan] FSA publishes Weekly Review No.30
jlne.ws/X7Oxtl

The European Securities And Markets Authority Has Published Its Opinion On The Emergency Measure By The Greek HCMC Under The Short Selling Regulation
The measure is expected to enter into force on 1 February 2013 at 8:30:00 hours (CET) and to be applicable until 24:00:00 (CET) on 30 April 2013.
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Exchanges & Trading Facilities

CME Group Grain and Oilseed Hours Customer Letter [pdf]
Press Release
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Exchanges Sector Ends 2012 On A High – FTSE Mondo Visione Exchanges Index Provides Investors With Several Top Picks
December Index Closed Up 5.2 Per Cent – Newly Established Japan Exchange Group, Inc (JPX) Enters FTSE Mondo Visione Exchanges Index
jlne.ws/X7OxJG

Burgundy: Monthly Report December 2012
In December:
jlne.ws/X7OxJJ

New Member Of MEFF
Barak Capital GT Limited, Proprietary Non-Clearing Member, Tel Aviv
jlne.ws/X7Ovl3

[CBOE] Restrictions on Transactions in Powerwave Technologies, Inc. (PWAV)
jlne.ws/X7OxJO

Changes in CBSX Fee Schedule Effective February 1, 2013
jlne.ws/X7OxJS

NYSE Euronext Companies Offer Enhanced Corporate Governance Solutions
jlne.ws/X7OxJU

Direct Edge Trading Notice #13-06: Fee Schedule Changes For EDGA And EDGX Effective February 1, 2013
jlne.ws/X7OxJW

Austrian Companies With Erste Group And The Vienna Stock Exchange On Road Show To London
jlne.ws/X7Ovl8

Hellenic Exchanges Change In The Composition Of The Board Of Directors
jlne.ws/X7Ovlb

NASDAQ Welcomes Gladstone Land Corporation (LAND) to The NASDAQ Stock Market
jlne.ws/X7Ovle

Hedge Funds & Managed Futures

UN pension fund seeks new deputy CEO
Sarah Krouse – Financial News
United Nations is recruiting a new deputy chief executive to its $45.95bn staff pension fund, following its decision to promote the previous incumbent to the scheme’s top job.
jlne.ws/X7Ovlg

Man Group Backs Former Citadel Manager for New Japan Hedge Fund
Bloomberg
Man Group Plc , the biggest publicly traded hedge fund manager, is backing a new Japan-focused hedge fund started by Toby Bartlett, a former manager at Citadel LLC and Highbridge Capital Management LLC, according to a statement.
jlne.ws/X7Oy0g

Guggenheim to Hire as Many as 10 Managers for Multistrategy Fund
Bloomberg
Guggenheim Global Trading, a subsidiary of closely held financial-services firm Guggenheim Partners LLC, plans to hire as many as 10 portfolio managers this year to expand its multistrategy hedge fund.
jlne.ws/X7Ovlj

BNY Mellon Named Largest Fund of Hedge Fund Administrator
BNY Mellon, the global leader in investment management and investment services, has been recognised as the world’s largest Fund of Hedge Fund (FoHF) administrator in HFMWeek’s bi-annual administrator survey.
jlne.ws/X7Oy0h

Apple dragging down hedge funds
CNN Money
Hedge funds will continue getting stung by the drop in Apple’s share price. A better stock picking environment may offset some of those losses in 2013.
jlne.ws/X7OvBy

DealBook: It’s Pensioners on the Side of Hedge Funds Making Their Case Against Argentina
New York Times
Several holdouts from a debt swap who are pensioners traveled to New York, a month before an appeals court is to make an important decision on a legal case that has pitted the hedge fund manager Paul Singer against the government of Argentina.
jlne.ws/X7Oy0n

The Hedge Fund Manager That Impounded Argentina’s Ship Is Now Going To War With Hess
Business Insider
If you were looking for a break from the drama surrounding Herbalife, Bill Ackman, and Carl Icahn, look no further. Hedge fund Elliott Management has decided to take its battle to overhaul energy company Hess Corporation to the people, and since that hedge fund is owned by none other than Paul Singer, this will likely be a fascinating fight.
jlne.ws/X7Oy0q

How to hold fickle commodities in your portfolio
Reuters via Yahoo! Finance
Commodities are among the most skittish investments. Not only do they react to global economic forces, they can seesaw with supply and demand, China’s voracious appetite for raw materials and the weather.
jlne.ws/X7OvBF

Banks & Brokers

Exclusive: JPMorgan bet against itself in “Whale” trade
Reuters via Yahoo! News
NEW YORK – There is a new twist in the London Whale trading scandal that cost JPMorgan Chase $6.2 billion in trading losses last year. Some of the firm’s own traders bet against the very derivatives positions placed by its chief investment office, said three people familiar with the matter.
jlne.ws/X7OygJ

Ex-SocGen Director Sues Over Firing, Withheld Bonus Pay
Bloomberg
A former Societe Generale SA director who oversaw Dutch derivatives trading sued the bank in Britain for unfair dismissal, withholding his final bonus and failing to consult him and co-workers before a group layoff.
jlne.ws/X7OvBJ

Jefferies Grants CEO Handler $58 Million in 2012, Future Pay
Laura Marcinek & Stephanie Ruhle – Bloomberg
Jefferies Group Inc. (JEF), the investment bank that agreed to sell itself to Leucadia National Corp. (LUK), paid Chief Executive Officer Richard Handler $19 million for fiscal 2012 and approved $39 million in restricted stock awards for the next three years.
jlne.ws/X7OvBM

TradeStation Ranked Among Top Five Online Brokers Overall and Tops for Equity Trading Tools in Major New Investor’s Business Daily Study of Active Investors
TradeStation, a Monex Group company (TSE:8698) and award-winning broker-dealer and futures commission merchant, has been ranked among the top five online brokers for Overall Customer Experience, as well as best for Equity Trading Tools and among the top five in three other key categories, in a major new annual survey of active investors conducted by Investor’s Business Daily (IBD).
jlne.ws/X7OygS

DealBook: Fischer to Leave Bank of Israel
New York Times
Stanley Fischer, a former vice chairman of Citigroup, announced on Tuesday that he would step down on June 30 as governor of Israel’s central bank.
jlne.ws/X7OvBP

Morgan Stanley lands two broker teams from rival UBS
Reuters via Yahoo! Finance
Morgan Stanley Wealth Management said on Tuesday it added two veteran adviser teams that managed a combined $750 million in client assets from rival brokerage UBS Wealth Management Americas.
jlne.ws/X7OygU

BofA Argues AIG Can’t Sue Over Devalued Mortgage Bonds
Bloomberg
Bank of America Corp. lawyers asked a federal judge to dismiss American International Group Inc. ’s fraud claims over devalued Countrywide Financial mortgage-backed securities it had to sell as part of the government bailout.
jlne.ws/X7OvBQ

Deutsche Bank Loses Global Oil, Gas Trading Head
Dow Jones
Deutsche Bank AG’s global head of oil and agriculture trading, John Redpath has left the company, the Reuters news agency reported Tuesday on its website, citing an unnamed source familiar with the matter.
jlne.ws/X7OygY

Deutsche Bank Names New Co-Heads of Investment Banking and Advisory
Wall Street Journal Blogs
Deutsche Bank’s reshuffling of top bankers continued this week, with the appointment of a new duo to lead the bank’s global Investment Banking Coverage and Advisory business.
jlne.ws/X7OvS5

HSBC Cayman’s Ex-CEO Jalles to Head Cayman Finance Trade Group
Bloomberg
The Cayman Finance trade group, which represent’s the country’s financial services industry, named Gonzalo Jalles as chief executive officer.
jlne.ws/X7OygZ

RBS Said to Cut Bonuses to $393 Million as Libor Fine Looms
Bloomberg
Royal Bank of Scotland Group Plc, Britain’s biggest publicly owned lender, may reduce the bonus pool at its investment bank by more than a third as it prepares to pay fines to U.S. and U.K. regulators for Libor manipulation, a person with knowledge of the plan said.
jlne.ws/X7OvS9

Gleacher & Co. founder leaving
Associated Press via Yahoo! News
Gleacher & Company Inc. said Tuesday that Chairman Eric Gleacher is leaving the investment banking firm.
jlne.ws/X7OvSa

Clearing & Settlement

Broadridge Selected by Questrade for New Self-Clearing Model
Broadridge Financial Solutions, Inc. (BR) today announced that Questrade selected Broadridge’s technology processing platform and integrated product solutions to support its transition to a self-clearing operating model in Canada .
jlne.ws/X7OvSc

ECC: UniCredit Bank CZ Becomes New General Clearing Member
jlne.ws/X7OvSe

CME Group Clearing Advisory: OTC FX MARGIN VOLATILITY FLOOR CHANGE
jlne.ws/X7OvSf

Indexes & Products

Press Release – Russell Investments
Russell Indexes today introduces the Russell High Efficiency Defensive Indexes, a new index series extending the popular Russell Defensive Index methodology. These new indexes, similar to the Russell Defensive Indexes, combine various economic and market risk factors, creating a “stability score,” to help investors identify high quality, low volatility stocks.
jlne.ws/X7Oyxk

Tokyo Stock Exchange: Calculation Of TOPIX And Other Indices In Relation To Equity Market Consolidation
jlne.ws/X7Oyxt

Vanguard Listed As New Product Provider Of Three ETFs To SIX Swiss Exchange
jlne.ws/X7Oyxu

ComStage ETF S&P SMIT 40 Launched On Xetra
jlne.ws/X7Ow8C

Technology

S&P Capital IQ’s Real Time Acquisition, QuantHouse, Expands Coverage in Asia
S&P Capital IQ is expanding its real time presence through the establishment of a Singapore office for its QuantHouse operation, which provides global next generation trading solutions. This expansion reflects the need for S&P Capital IQ to support its growing client base in the region and to capture the demand for low latency services from a diverse range of businesses, spanning the US, Europe and Asia regions.
jlne.ws/X7OyNK

Enforcement

SEC Charges Trader in Houston-Area Investment Scheme Targeting Lebanese and Druze Communities
The Securities and Exchange Commission today charged a day trader in Sugar Land, Texas, with defrauding investors in his supposed high-frequency trading program and providing them falsified brokerage records that drastically overstated assets and hid his massive trading losses.
jlne.ws/X7Ow8E

New Zealand’s Financial Markets Authority: Guilty Plea In Capital + Merchant Finance Case
jlne.ws/X7OyNM

Environmental & Energy

 

Asia-Pacific

China to crack down on banks’ Ponzi-style “fund pools”
Reuters via Yahoo! Finance
China’s banking regulator will strengthen regulation of banks that use faulty accounting practices to disguise losses on the high-yield investment products that are increasingly replacing traditional deposits as banks’ key sources of funding.
jlne.ws/X7Ow8J

Junk Euphoria Crosses Pacific as Sharp Worry Fades
Bloomberg
Japan’s junk bonds are joining the global rally as optimism over Prime Minister Shinzo Abe’s economic stimulus boosts investor appetite for riskier debt.
jlne.ws/X7Ow8K

South Korea warns it may tighten capital flow controls
Reuters via Yahoo! Finance
South Korea warned speculative investors against betting on the won rising fast on Wednesday and said it would consider new measures similar to the Tobin Tax, or a levy on financial transactions, if needed in the future.
jlne.ws/X7Ow8L

Announcemnet of Planned Running Test for Next Generation EDINET (Electronic Disclosure for Investors’ NETwork)
jlne.ws/X7Ow8Q

HKFE Announces Revised Margins For Futures Contracts
jlne.ws/X7OyNX

Shanghai Stock Exchange: Notice Of Adjustment To Scope Of Underlying Securities Of Margin Trading, Securities Lending
jlne.ws/X7OyO0

Shanghai Stock Exchange Credit Bond 100 Index To Be Launched
jlne.ws/X7OyO2

Frontier Markets

Oman rules may spur reform of Islamic finance scholars
Reuters via Yahoo! Finance
Oman’s new Islamic banking rules could encourage the development of a larger pool of sharia scholars and ultimately help to raise operating standards for them around the world, according to bankers and scholars.
jlne.ws/X7Oz4g

Goldman and M Stanley cool on India licences
James Crabtree in Mumbai – FT.com
Two of the world’s most prominent investment banks have cooled on attempts to win a full Indian banking licence, in a sign of growing awareness of the costs facing international institutions seeking to expand in Asia’s third-largest economy.
jlne.ws/X7Owp8

Deutsche Bank Said to Put Dubai Equity Analysts on Contracts
Bloomberg
Deutsche Bank AG , Europe’s biggest lender by assets, is placing Dubai-based equity analysts on consulting contracts as it seeks to avoid job cuts in the Middle East , according to two people familiar with the matter.
jlne.ws/X7Oz4k

Palestine Exchange: Palestine Securities Exchange Co. Preliminary Year-End Financial Statements For The Year 2012
The Palestine Exchange (PEX) received unaudited year-end preliminary financial statements from the Palestine Securities Exchange Company (PSE). PEX disclosure rules give all PEX listed companies 45 days to report their preliminary annual financial statements as reviewed by the company’s internal auditor.
jlne.ws/X7Oz4l

Closure Of Bursa Malaysia Berhad – Market Holidays
Bursa Malaysia Berhad (Bursa Malaysia) and its subsidiaries will be closed on these dates in conjunction with the following public holidays:
jlne.ws/X7Owpc

The National Bank Of Abu Dhabi Selects BT To Connect Global Operations
jlne.ws/X7Owpf

MCX-SX Equity And Equity Derivatives Segment To Be Inaugurated On Feb 9, 2013 By Hon’ble Union Finance Minister Shri P. Chidambaram
jlne.ws/X7Oz4u

Miscellaneous

Minder Initiative: The Wrong Approach
Christian Katz CEO SIX Swiss Exchange Explains Why It’s Disconcerting That The Initiative To Restrict The Bonuses And Salaries Is Only Aimed At Companies Listed On The Swiss Exchange
jlne.ws/X7Owpl

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