First Read

The Right Stuff: Divento Academy Looks to Train the Next Generation of Traders
Jim Kharouf, JLN

In the height of the 2008-09 financial crisis, many in the financial industry wondered where the next generation of traders would come from. Amid the meltdown of Lehman Brothers, the Libor scandal and other high-profile enforcement actions, and a massive downsizing of bank trading desks, there has been real concern that the existing pool of trading talent was being tossed out and the stream of new traders was drying up.

Some proprietary trading firms have taken it upon themselves to attract students, teach them what they know and set them on course to trade these markets successfully. Firms like London-based prop firm Divento Financial, which launched Divento Academy last July, have taken a different approach to the more traditional prop shop methods of simply training them for their own use and discarding the weakest candidates.

Read the rest of the story on JohnLothianNews.com HERE

++++

One Million Served
One more figure missed yesterday. Fidessa’s Fragmentation Index, frag counter passed the 1 million mark. Congrats to Steve Grob. One million Fragulators can’t be wrong: Fidessa Fragmentation Index
jlne.ws/1W4FWeo

++++

NYSE Owner ICE Says It Won’t Make an Offer for London Stock Exchange
Bloomberg
Intercontinental Exchange, Inc. owner of the New York Stock Exchange, said it would not make an offer for the London Stock Exchange after undertaking due diligence.
goo.gl/mWqC0U

***** Just a headline, but an important one. What happened to the “ICE Chills on LSE Offer” story? See WSJ story in Lead Stories for more details.

++++

ICE beats 1Q profit forecasts
CNBC
IntercontinentalExchange Group Inc. (ICE) on Wednesday reported first-quarter profit of $369 million. The Atlanta-based company said it had profit of $3.08 per share. Earnings, adjusted for one-time gains and costs, came to $3.68 per share.
jlne.ws/26SWYQG

***DA: For a breakdown of ICE interest rate futures and options, click on the nifty infographic below.

++++

ICE Q1 2016 IR Snapshot

++++

Purdue, CME Group to take monthly ‘barometer’ of confidence in agricultural economy
CME Group
Purdue University’s Center for Commercial Agriculture and the derivatives marketplace CME Group are partnering to produce the Purdue/CME Group Ag Economy Barometer, a monthly nationwide measure of the health of the U.S. agricultural economy.
goo.gl/5ED0Sj

***** Wait for the Purdue/CME Group Ag Economy Barometer tractor…err, tracker ETF.

++++

CBOE to open in July first overseas office in London
Futures & Options World
jlne.ws/1Zc1EeH

***** I have a great idea for CBOE. See below.

++++

U.S. firm to turn Britain’s red phone boxes into mini-offices
Reuters
goo.gl/O8uUIK

***** This should work for the CBOE’s first office.

++++

Innovation Hub: Regulatory sandbox proposal
ASIC
ASIC today provided a further update on its Innovation Hub (see 15-211MR for our previous update). ASIC’s Innovation Hub has now been operating for just over a year and is continuing to assist financial technology (fintech) start-ups navigate the regulatory framework.
goo.gl/7B28DV

***** Regulators being nice to fintech start-ups? The world is turned upside down.

++++

Is the Tech Bubble Popping? Ping Pong Offers an Answer; Sales of tables rise and fall with the startups that love them
By ZUSHA ELINSON – WSJ
SAN FRANCISCO— Twitter’s gloomy quarterly report last week unsettled investors. They might have anticipated trouble more than a year ago had they noticed one key indicator.
goo.gl/FfTycb

****** The ping pong indicator is directly correlated with the kegorator index, though be careful with the latter as it can go flat.

++++

China Said to Explore Taking Stakes in Some News Websites
Bloomberg News
Stakes would be in exchange for providing `news’ licenses; Government would hold board seats, could block content
China is considering taking board seats and stakes of at least 1 percent in operators of some Internet portals and mobile apps in exchange for granting news licenses, according to people familiar with the plan.
goo.gl/O2nt97

***** Free markets demand free press. This is a one percent chill factor.

++++

Tuesday’s Top Three
So far this week Zero Hedge has been doing very well being way out in front with the story We Are All Zero Hedge. Seems Bloomberg’s efforts to unmask Zero Hedge has run into the Streisand Effect. In a relatively distant second place Wall Street Told to Fear the Machine as Emerging Tech Takes Jobs looks forward to when our robot overlords take over. Holding third place is Biggest fight in treasuries pits Citadel against Citigroup

++++

PRMIA Chicago and CAIA present:
CTAs and Commodity Indices: A Fresh Perspective

Thursday, May 19, 2016 11:45 a.m. – 1:00 p.m.

>>> Register now

Douglas Ashburn, COO and Editor-at-Large, John J. Lothian & Company, Inc.
Topic: Is 2016 a “Make-or-Break” Year for Managed Futures?
During the financial crisis, managed futures enjoyed solid returns while equity markets plunged. As equity markets turn bearish in 2016, will managed futures have another run of out-performance, and if not, what will the future hold for this asset class?

Hilary Till, Principal, Premia Capital Management, LLC
Topic: What are the Sources of Return for CTAs and Commodity Indices?
Ms. Till will review structural sources of returns for CTA’s and Commodity Indices. The presentation is based on a recent Journal of Wealth Management article, “What Are the Sources of Return for CTAs and Commodity Indexes? A Brief Survey of Relevant Research.” The presentation will cover the long-term return sources for both managed futures programs and commodity indexes; the investor expectations and the portfolio context for futures strategies; and how to benchmark these strategies.

To register for the event, click HERE

Sponsored
by:
CAIAPRMIA

 

Lead Stories

Intercontinental Exchange Opts Not to Bid for London Stock Exchange
WSJ
New York Stock Exchange operator Intercontinental Exchange Inc. said Wednesday that it doesn’t intend to make an offer for London Stock Exchange Group PLC, likely paving the way for the U.K. exchange’s merger with Germany’s Deutsche Börse.
jlne.ws/1QS3Fqr

***DA: And the market reacts. LSE shares were down as much as 9 percent this morning, and are down about 7 percent as of press time. Deutsche Boerse is trading up about six percent.

Seven big banks settle U.S. rate-rigging lawsuit for $324 million
BY JONATHAN STEMPEL – Reuters
Seven of the world’s biggest banks have agreed to pay $324 million to settle a private U.S. lawsuit accusing them of rigging an interest rate benchmark used in the $553 trillion derivatives market.
goo.gl/NaC9jK

Robots Will Strike Asset Management Firms First; The rise of financial technology threatens all of Wall Street, a new survey shows.
Julie Verhage – Bloomberg
According to a new survey (PDF) from the CFA Institute, Wall Street is getting a bit worried about fintech replacing its jobs.
goo.gl/Nbjc5Z

Fed Plan to Avoid Another Lehman Targets Big Bank Customers
Jesse Hamilton – Bloomberg
Rule would impose stay on swaps contracts after banks fail; Proposal expands Wall Street accord, wraps in hedge funds
Hedge funds, insurers and other companies that do business with Wall Street megabanks are poised to pay a price for regulators’ efforts to make sure any future collapse of a giant lender doesn’t tank the entire financial system.
goo.gl/SGP7DY

LSE Plan Was Meant to Preempt U.S. Bid, Deutsche Boerse CEO Says
Angela Cullen – Bloomberg
`Widely known’ LSE attracting takeover interest, Kengeter says; Deal will create `liquidity bridge’ between Frankfurt, London
Deutsche Boerse AG Chief Executive Officer Carsten Kengeter said he embarked on a merger plan with London Stock Exchange Group Plc despite uncertainty about Britain’s future in the European Union to preempt a potential U.S. suitor from pouncing on its U.K. peer.
goo.gl/Xdvong

Deutsche Boerse to keep Frankfurt focus after LSE merger – CEO
Reuters
Germany’s Deutsche Boerse (DB1Gn.DE) aims to keep its derivatives trading and settlement operations in Frankfurt after its planned $30 billion (20.6 billion pound) merger with LSE Group (LSE.L), its chief executive said.
goo.gl/V8Q41a

Goldman Sachs Tech Director to Lead IT at Online Brokerage OptionsHouse
WSJ
Lance Braunstein, former managing director and global head of investment banking technology at Goldman Sachs Group Inc., has been named CIO at Aperture Group LLC, the owner of online brokerage OptionsHouse.
He started April 26 and reports to Aperture Group CEO Michael Curcio.
jlne.ws/1QS42kN

Brexit blamed for surge in uncertainty; US academics attribute UK slowdown to referendum concerns
by: Chris Giles, Economics Editor
Economic uncertainty has hit its highest level in Britain in at least 19 years in the lead-up to the EU referendum, according to an influential index compiled by Stanford University.
/goo.gl/dsTAMx

You Still Want a Fintech Revolution?
By Michael P Regan – Bloomberg Gadfly
Remember the “fintech revolution” that was going to reshape the banking industry? Well, don’t go hoisting any new flags over the castle just yet. Shares of On Deck Capital, the online lender to small businesses, fell as much 37 percent on Tuesday and have coughed up about three-quarters of their value since the company went public in 2014:
goo.gl/CuXFKW

Wobbles could topple the London Stock Exchange
By ALEX BRUMMER – THE DAILY MAIL
The least one might have expected from a putative chief executive of a ‘merger of equals’ of Deutsche Boerse and the London Stock Exchange is an understanding of the rules governing takeovers in the City of London.
goo.gl/31iepo

Fed official raises pressure on ‘too big to fail’ banks
JOANNA SLATER – The Globe and Mail
At first glance, Bernie Sanders, the self-described socialist running for president, would seem to have little in common with Neel Kashkari, a former Goldman Sachs banker and Republican who now leads a branch of the U.S. Federal Reserve.
goo.gl/oNBLlO

Central banks conspire to harvest Bitcoin’s revolutionary technology
JEREMY WARNER – Telegraph
For someone who says he shuns the limelight, Craig Wright has chosen an oddly high profile way of laying claim to the title of digital genius behind the Bitcoin phenomenon.
goo.gl/u1ClYL

The perils that lurk in US banking’s dominance
ANTHONY HILTON – Standard
This year marks the 30th anniversary of the decision in 1986 to strip away all the protections for domestic financial institutions and open up the London capital markets to any foreign firm that cared to set up here.
goo.gl/vsxsuC

The UK Has Had Consumer Price Deflation For 3 Years Now: Thus Wages Are Getting Better
Tim Worstall – Forbes
And interesting little point being noted in the British papers today: consumer prices have been going down for three straight years now. This is good news of course: it means that incomes are going further, people are being made richer by this fact. This isn’t the dread deflation though, it’s not a decline in the general price level. So it is unabashedly good news however much the retailers themselves might want to complain about the brutal competition which is causing it. And of course in such an environment it’s not all that much of a surprise that some of the retailers, like BHS just have, are going bust.
goo.gl/IG5pJW

Eurex Clearing boss warns of negative rates hit on sec finance unit; Negative rates in Europe have hit demand for repo and securities finance products.
By Paul Walsh – The Trade
Clearstream’s global securities finance (GSF) could face continuing declines in revenue as a result of negative rates in Europe, according to the head of Eurex clearing.
goo.gl/2xClTo

Regulatory

AMF’s Education and Good Governance Fund supports ten projects
AMF
The Autorité des marchés financiers (the “AMF”) has announced that ten projects will receive a total of $748,717 in funding through the Education and Good Governance Fund (EGGF).
goo.gl/RQRZH1

Further update on Stronger Super regime
ASIC
ASIC today provided an update on aspects of the Stronger Super regime aimed at providing the superannuation industry with certainty around the start dates for key superannuation reforms.
goo.gl/r8mspl

Self-Regulatory Organization (SRO) Rulemaking and National Market System (NMS) Plans
SEC
CBOE: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Amend the Fees Schedule (Release No. 34-77758; File No. SR-CBOE-2016-040); see also Exhibit 5
/goo.gl/h0yuDn

Final Rule: Changes to Exchange Act Registration Requirements to Implement Title V and Title VI of the JOBS Act (17 CFR Parts 230 and 240; Release No. 33-10075; 34-77757; File No. S7-12-14; ; RIN 3235-AL40)
SEC
/goo.gl/h0yuDn

SEC Adopts Amendments to Implement JOBS Act and FAST Act Changes for Exchange Act Registration Requirements; All JOBS Act Mandates Are Now Complete
SEC
The Securities and Exchange Commission has approved amendments to revise the rules related to the thresholds for registration, termination of registration, and suspension of reporting under Section 12(g) of the Securities Exchange Act of 1934. These amendments implement provisions of the Jumpstart Our Business Startups Act (JOBS Act) and the Fixing America’s Surface Transportation Act (FAST Act).
/goo.gl/FGRfsa

SIFMA Executive Vice President Randy Snook Remarks as Prepared for SIFMA 2016 Operations Conference & Exhibit
SIFMA
SIFMA Executive Vice President Randy Snook delivered opening remarks at the 43rd Annual Operations Conference in Miami Beach.
goo.gl/mE6yk4

Financial Services Compensation Scheme – Changes to the Compensation sourcebook: feedback on CP15/40 and final rules
UK FCA
In this Policy Statement we report on the main issues arising from Consultation Paper 15/40: Financial Services Compensation Scheme:changes to the Compensation sourcebook, and publish the final rules.
goo.gl/KViv3r

Exchanges & Trading Facilities

LME and LME Clear Boards appoint new independent director
London Metal Exchange
The Boards of the London Metal Exchange (LME) and LME Clear are pleased to announce the appointment of Antony Stuart as an independent non-executive director. Mr Stuart is a chartered accountant with 30 years’ experience as an investment banker and corporate adviser. Before his retirement in 2011, he was Managing Director at NM Rothschild.
jlne.ws/1X6Lfd0

Euronext Announces Volumes for April 2016
Press Release
Euronext, the leading exchange in the Eurozone, today announced trading volumes for April 2016. Average daily transaction value on the Euronext cash order book of EUR6,948 million (-23.4% compared with April 2015). Also,on a year-to-date basis, the overall average daily volume on Euronext derivatives stands at 549,806 contracts (+0.1% compared to 2015 YTD) and the open interest increased by 14,827,612 contracts (+3.9% compared to end of April 2015).
jlne.ws/1OdYGjP

Qatar Stock Exchange Organizes London Forum To Promote Investment In Qatari Listed Companies
Mondovisione
Qatar Stock Exchange (QSE), in coordination with Goldman Sachs, today commenced in London a roadshow that aims to promote investment in the Qatari companies listed on QSE and support their investor relations practices.
goo.gl/oO6KK9

Ljubljana Stock Exchange: Monthly Statistical Report April 2016
Mondovisione
goo.gl/fJ7Iyi

NSE, BSE to extend gold ETF trading hours on Akshaya Tritiya; Gold ETFs track physical market gold prices & each unit of these ETFs is generally equivalent to 1gm of gold
Business Standard
Leading stock exchanges the NSE and BSE on Wednesday announced extended trading hours for Gold Exchange Traded Funds (ETFs) till 1900 hrs on May 9, on account of Akshaya Tritiya.
goo.gl/Q0GUAd

ASX Presentation to Macquarie Conference
ASX
Attached is a copy of an ASX presentation to investors that will be delivered at the Australian Macquarie Securities Conference held in Sydney on 4 and 5 May 2016.
goo.gl/92bXbV

ASX Compliance Monthly Activity Report – April 2016
ASX
Attached is a copy of the ASX Compliance Monthly Activity Report for April 2016.
goo.gl/T9KqRQ

ASX Group Monthly Activity Report – April 2016
ASX
Attached is a copy of the ASX Group Monthly Activity Report for April 2016.
goo.gl/s5YaiS

NSE to launch platform for financing SMEs against bills; Likely to go live by the end of this calendar year
Shrimi Choudhary – Business Standard
The National Stock Exchange (NSE) is planning to launch a new trading platform for bill discounting or trade receivables of micro, small and medium enterprises (MSME). The country’s largest exchange has forged a joint venture with the Small Industries Development Bank of India (Sidbi) for the new platform, which is likely to go live by the end of this calendar year, according to people in the know.
goo.gl/2xAgWg

SGX reiterates directors must disclose interest; boards are ultimately responsible for announcements
SGX
Singapore Exchange (SGX) notes the executive summary of the Special Audit Report released by Singapore Post Limited (SingPost).
goo.gl/Qwcm6J

Technology

Itiviti expands support of equity options markets
Business Wire
Itiviti, a world-leading technology provider for the capital markets industry, today announced the release of two new gateways in the equity options space, augmenting the current offering of Chicago Board Options Exchange (CBOE) and CBOE’s C2 with connectivity to Nasdaq PHLX and the International Securities Exchange (ISE).
jlne.ws/1OdYwZW

GreenKey Appoints Richard Garnier Chief Revenue Officer
PR Newswire
GreenKey, creator of an award-winning voice-driven collaboration platform for global financial market participants, announced today the appointment of Richard L. Garnier to the new position of Chief Revenue Officer, effective immediately. A 30-year financial services and information technology veteran and former executive with Thomson Reuters, Garnier is responsible for the firm’s global sales, service, marketing and strategic partnership initiatives.
jlne.ws/1OdYoJX

Eze Software Group Wins Middle-, Back-Office System Awards
Eze
Eze Software Group, a premier provider of global investment technology, has seen Eze Software Investment Suite recognized for its middle- and back-office capabilities by two leading industry publications. HFM Week awarded the suite the title of “Best Fund Accounting and Reporting Solution”, and FTF News named the suite “Best Middle-to-Back-Office Integration Solution” at its 2016 Technology Innovation Awards.
jlne.ws/1OdZiG8

Blockchain’s Transparency: Double-Edged Sword?
marketsmedia.com
If Wall Street does not implement blockchain properly, the distributed ledger’s transparency quickly turn from a major benefit to a major problem, according to speakers at the Consensus 2016 blockchain conference in Midtown Manhattan.
The nascent architecture holds great potential as that the only other facility that provides the same level of trade transparency as Trade Information Warehouse operated by the Depository Trust & Clearing Corp. can provide, according to Greg Schvey, a partner at blockchain-platform vendor Axoni.
jlne.ws/1WI9rlj

TriOptima, DTCC to Reconcile Asia-Pacific Data
Waters Technology
TriOptima’s triResolve service gets data directly from DTCC’s global trade repository.
goo.gl/Z7j58z

Blockchains and blood reserves
Izabella Kaminska – FT
Reserves. Something not needed for immediate use but available if required, or the act of keeping back something today for future use or for a special purpose.
goo.gl/V5oBRY

Moore’s Law Running Out of Room, Tech Looks for a Successor
By JOHN MARKOFF – NY Times
For decades, the computer industry has been guided by a faith that engineers would always find a way to make the components on computer chips smaller, faster and cheaper.
goo.gl/yvtiwj

Australia hopes fintech will be its golden ticket, but it’s not that easy
BY ARIEL BOGLE –
Australia’s gone mad for fintech, but whether it will prove the country’s golden ticket as the mining boom dries up is another question.
goo.gl/LaoGhV

Politics

Trump terrifies the planet: The entire world is watching us with fear and loathing; The South Sudanese have seen unspeakable horrors, and even they tremble at the prospect of a Trump presidency
NICK TURSE – Salon
I’m sitting in the dark, sweating. The blinding white sun has long since set, but it’s still in the high 90s, which is a relief since it was above 110 earlier. Slumped in a blue plastic chair, I’m thinking back on the day, trying to process everything I saw, the people I spoke with: the woman whose home was burned down, the woman whose teenage daughter was shot and killed, the woman with 10 mouths to feed and no money, the glassy-eyed soldier with the AK-47.
goo.gl/kUckmD

Hedge Funds & Managed Futures

A Victim of its Own Success
by Joshua M Brown – The Reformed Broker
Steve Cohen made some comments about the state of the hedge fund industry at a rare public appearance last night:
goo.gl/g3rxfl

AIG’s Losses Show The Smart Money Has Largely Avoided Hedge Funds
Nathan Vardi – Forbes
William Heyman, the longtime chief investment officer of Travelers, knows a lot about hedge funds. In 1979, he started one of the first risk-arbitrage hedge funds. In the 1990s, he ran Sandy Weill’s internal hedge fund, Tribeca Investments, at what would become Citigroup.
goo.gl/HDe2tU

These Six Charts Show Investors Don’t Have Faith in U.S. Stocks
Oliver Renick – Bloomberg
Low-volatility ETF inflows and stubborn short interest levels; Valuations for defensive industries won’t stop going up
While $3 trillion has been added to equities in 11 weeks and the S&P 500 has recently been points from a record, you couldn’t tell from the behavior of investors. From flows to exchange-traded funds to levels of short interest and valuations for defensive stocks, bearish sentiment rules. Here are six charts that show how skeptical investors still are.
goo.gl/VnFkWH

Investors Boost Gold Assets in World’s Top ETF by Most Since `11
Luzi-Ann Javier – Bloomberg
Inflows in SPDR Gold reach $7.1 billion, beating all ETFs; Gold prices rally 22 percent this year as rates stay low
Investors are piling back into gold, and they’re coming in droves.
goo.gl/8wbTku

Negative Yields No Bar to Best Bond Market Conditions Since 2009
Susanne Walker Barton, Liz McCormick – Bloomberg
Excess supply to shrink most since recession, JPMorgan says; Record low yields ahead as issuance falls, bank predicts
In a world awash with debt, it’s hard to imagine that there may not be enough to go around.
goo.gl/tauwyz

Fragile Currency-War Truce May Fracture
By Mark Gilbert – Bloomberg
The foreign exchange market is notorious for overshooting. A currency that starts moving in a particular direction as economic fundamentals change will often end up at a rate that can’t be justified by the data. So trying to nudge the matrix of currency values is akin to policy makers attempting to steer a Ouija board pointer — which is exactly what seems to have happened since their February Group of 20 meeting in Shanghai produced a tacit truce in the currency war.
goo.gl/JrCWMB

If Larry Summers is right about secular stagnation, he’s also right about Harvard’s endowment
Matthew C Klein – FT
Sticking with a plan after it seems to have stopped working can be admirable persistence — or it can be bull-headed stubbornness. The question is whether recent difficulties are just temporary setbacks bound to reverse or, instead, you’re on the wrong side of a fundamental change in the way the world works.
goo.gl/1yMQPE

Banks & Brokers

R.J. O’Brien Europe Limited Expands Listed FX Offering with Hiring of Peter Jerrom, John Burt
Yahoo Finance
Chicago-based R.J. O’Brien & Associates (RJO), the oldest and largest independent futures brokerage and clearing firm in the United States, announced today that its London-based affiliate R.J. O’Brien Europe Limited (RJO Europe) has hired Peter Jerrom and John Burt as Senior Vice Presidents, Listed Foreign Exchange (FX) Brokers.
jlne.ws/1OdYiC6

Aperture Group Appoints Lance Braunstein CIO
Business Wire
Aperture Group, LLC, the owner of OptionsHouse, announced today that Lance Braunstein has been named Chief Information Officer. Mr. Braunstein joins Aperture Group from Goldman Sachs Group, Inc. where he was Managing Director, Global Head of Investment Banking Technology. As CIO of Aperture Group, Mr. Braunstein is responsible for developing and implementing the overarching technology strategy needed to support the company’s goals.
jlne.ws/1TIJDTF

UBS Profit Misses Estimates, Hurt by Trading Revenue Slump
Jeffrey Voegeli, Donal Griffin – Bloomberg
Investment-banking unit sees profit drop 67% in first quarter; UBS CEO Ermotti says enviroment remains `challenging’
UBS Group AG’s first-quarter profit missed analysts’ estimates, hurt by the weakest start to the year in investment banking since Chief Executive Officer Sergio Ermotti began to reshape that business four years ago.
goo.gl/iEWaUP

Société Générale Profit Rises Despite Weakness in Investment Banking
By DAVID JOLLY – NY Times
Société Générale, one of France’s largest banks, reported on Wednesday a rise in first-quarter profit, as a one-time revaluation of its own debt and a shift in the way it prepares for potential bad loans helped it offset a weak market for investment banking.
goo.gl/YqzdlY

SocGen eyes fresh cost cuts; Profits beat expectations in Q1 but weakness continues at investment bank division
Michael Stothard in Paris – FT
Société Générale says it will deepen cost cuts at its investment bank after rocky trading conditions hit first-quarter results.
/goo.gl/1sjkUp

UBS Downgraded as Profit Drop Seen Clouding Dividend Prospects
Jeffrey Voegeli – Bloomberg
Morgan Stanley cuts UBS to equal-weight from overweight; Credit Suisse analysts reduced dividend estimate for this year
UBS Group AG was downgraded at Morgan Stanley after the Swiss lender’s lower-than-expected first-quarter earnings muted the outlook for dividends.
goo.gl/S6mRkK

Credit Suisse Takes the Pain
By Christopher Langner – Bloomberg
Credit Suisse has started to reduce the pain of its old mistakes. The Swiss bank has agreed to sell a portfolio of distressed debt to an arm of private-equity firm TPG for $1.3 billion. That’s a sign that not only is the bank moving ahead with Chief Executive Officer Tidjane Thiam’s plan to reduce exposure to the asset class, it’s doing so at a lower cost.
goo.gl/8s8aOp

Clearing & Settlement

EU Legislation Imposing Clearing Obligation for Credit Default Swaps Published
Shearman & Sterling LLP – JDSupra
A Commission Delegated Regulation on central clearing for credit default swaps supplementing the European Markets Infrastructure Regulation was published in the Official Journal of the European Union. Under the Regulation, two classes of credit default over-the-counter derivatives are subject to the clearing obligation under EMIR: iTraxx Europe Main and iTraxx Europe Crossover.
jlne.ws/1WIa0vw

triResolve’s Repository Reconciliation service and DTCC collaborate to reconcile data reported to Asian regulators
Press Release
TriOptima, the award-winning post trade infrastructure provider, announces today that its triResolve Repository Reconciliation service is actively reconciling data reported to The Depository Trust & Clearing Corporation (DTCC)’s Global Trade Repository (GTR) by institutions regulated by the Monetary Authority of Singapore (MAS), the Australian Securities and Investments Commission (ASIC) and the Hong Kong Monetary Authority (HKMA).
jlne.ws/1WI9kGq

Bloomberg’s OTC Electronic Trading Services Offer Direct Connectivity To Eurex Clearing
Press Release
Eurex Clearing, Europe’s leading clearing house and part of Deutsche Börse Group, has connected Bloomberg as an approved trade source for EurexOTC Clear, the Interest Rate Swaps Clearing offering of Deutsche Börse.
jlne.ws/1WI9PjI

Calypso forms cloud-based clearing alliance with Sernova Financial
Finextra
Calypso Technology Inc., a leading provider of capital markets software, and Sernova Financial, an innovative provider of turn-key post-trade services, today announced a partnership to deliver next-generation, cloud-based clearing services.
jlne.ws/1WI9TQF

Indexes & Products

China’s Stock Suspensions Seen as Obstacle to MSCI Inclusion
Bloomberg
If anything stops MSCI Inc. from including Chinese shares to benchmark indexes in its review, it will be the overuse of trading halts.
That’s according to a Bloomberg poll of strategists and fund managers, with 16 of the 23 surveyed naming stock suspensions as a main obstacle to inclusion. Capital controls, government intervention, stock beneficiary ownership and cross-border investment quotas were other common concerns ahead of MSCI’s decision in June, the survey showed.
jlne.ws/1WIaEcj

SGX Introduces MSCI China Index Contracts To Meet Investor Demand
Finance Magnates
The Singapore Exchange (SGX) today launched its MSCI China Free Index (SM) futures and options contracts as part of its efforts to become the exchange of choice for trading in China, and follows last month’s upbeat Q3 FY2016 metrics, as reported by Finance Magnates. The SGX MSCI China contracts have also secured the approval of the Commodity Futures Trading Commission (CFTC), enabling U.S. investors to trade them directly from within the U.S.
jlne.ws/1WIaL7Q

Bats Welcomes REX Shares as New Issuer to The Bats ETF Marketplace
BATS
jlne.ws/1TteSPZ

Will Smart-Beta Fixed-Income ETFs Catch On?
Equities.com
Market cap weighted equity indices are somewhat like a popularity contest. The more investors bid up certain stocks, the larger weight that stock will garner in the index.
But as we are often reminded by looking at the wall in many 5th grade classrooms: “What is right is not always popular and what is popular is not always right.”
jlne.ws/1WIb8ze

Eurex’s MSCI Derivatives: We help you to navigate the transition!
Eurex
Background on index review
goo.gl/0rklI9

Strong demand in our Select Dividend Index contracts
Eurex
Open interest stood at 20,000 contracts at the beginning of 2015 and more than doubled to currently 42,000 contracts. The rise is mainly a result of the increasing demand in the Eurozone based EURO STOXX® Select Dividend 30 Index Futures but also in the STOXX® Global Select Dividend 100 Options.
goo.gl/Gz2DtZ

Trading in Weekly Options on EURO STOXX® Banks Index made easier
Eurex
The Market-Making and revenue sharing program for Weekly Options on EURO STOXX® Banks Index has been prolonged until 31 December 2016, assuring the required liquidity for continued trading activity. Optiver and Susquehanna are actively quoting since the introduction of the product.
goo.gl/gLazr2

Enforcement

SEC and Law Enforcement Partners Crack Stock Promotion and Kickback Schemes
SEC.gov
The Securities and Exchange Commission today announced fraud charges against 10 individuals involved in schemes to trick investors into buying shares of a particular company stock. The schemes were allegedly fraught with cash bribes and other kickbacks to registered representatives and unregistered brokers who solicited investors to buy stock in ForceField Energy Inc. The SEC alleges that investors were unaware those soliciting them were being paid by a ringleader – ForceField’s then-chairman of the board Richard St. Julien – to steer them to the stock, and that some of the perpetrators attempted to evade law enforcement by going so far as to communicate with prepaid disposable “burner” phones and encrypted, content-expiring text messages.
jlne.ws/1rRCBn0

Seven Banks to Pay $324 Million to Resolve ISDAfix Claims
Bob Van Voris – Bloomberg
Bank of America, Barclays, Citigroup, Credit Suisse settle; Investors claimed banks colluded in setting benchmark rate
Seven banks including Bank of America Corp., Barclays Bank Plc and Citigroup Inc. agreed to pay $324 million to settle claims they conspired to rig the ISDAfix benchmark, which is used in the sale of interest-rate derivatives and other financial instruments.
goo.gl/UzJZSx

Environmental & Energy

Number of investors ignoring climate risk rose last year
By Jocelyn Timperley – BusinessGreen
The number of large investors who completely ignore climate change risks in their financial decisions rose last year, according to a new ranking of the top 500 funds released yesterday.
goo.gl/MdPmHG

India Is Suffering One of Its Worst Droughts in Decades; Two years of poor rains add pressure to manage water better in India
Archana Chaudhary – Bloomberg
No rain, no water, no choice. That’s how 26-year-old Vijay Jadhav describes his decision to travel with his family to coastal Mumbai, India’s financial capital, from a parched smallholding more than 400 kilometers (250 miles) further east in Maharashtra state.
goo.gl/56ySBc

Trump’s Border Wall Would Be Bad for the Environment
By Chris Clarke – KCET
It’s more and more likely that Donald Trump will become the Republican Party’s nominee in the Presidential election.
/goo.gl/sXCUlx

Colorado Court Strikes Down Local Bans on Fracking
By Michael Wines – The New York Times
Colorado’s Supreme Court on Monday struck down local government prohibitions on hydraulic fracturing, or fracking, handing oil and gas companies a victory in a lengthy battle over energy production in the environmentally conscious state.
nyti.ms/1Z8WIao

US producers Ultra and Midstates fall victim to low oil price; Default rate for US junk-rated energy groups hits record after pair pushed into default
Eric Platt in New York – FT
The rebound in the oil price has failed to prevent the default rate for US junk-rated energy groups hitting a fresh record, and prompted warnings it could leave the industry saddled with zombie companies.
/goo.gl/HEp8G5

Maersk profits hit by low freight rates and oil price; Shipping line bears brunt but shares rise as group maintains full-year guidance
by: Richard Milne, Nordic Correspondent – FT
Profits at AP Møller-Maersk slumped as record low container shipping rates and the weak oil price hurt the Danish conglomerate.
/goo.gl/YW5bJ8

Asia-Pacific

Why Hong Kong exchange’s Qianhai metal plan won’t fly without physical delivery
– South China Morning Post
Hong Kong Exchanges and Clearing’s plan to set up a metal trading platform in Qianhai is considered a breakthrough for the local bourse to expand into commodities trading but brokers and metal manufacturers say such a plan would be successful only if it can arrange physical delivery.
jlne.ws/1QS3lb7

The $571 Billion Debt Wall That Points to More Defaults in China
Bloomberg News
Defaults seen spreading as borrowers struggle to refinance; April issuance sank 43% as 143 billion yuan of sales canceled
Chinese debt investors are turning bearish at just the wrong time for the nation’s corporate borrowers, which face a record 3.7 trillion yuan ($571 billion) of local bond maturities through year-end.
goo.gl/iFkr4y

China’s Stock Suspensions Seen as Obstacle to MSCI Inclusion
Bloomberg News
Majority of participants in survey name halts as concern; Half of nation’s equity market shut down during 2015 rout
If anything stops MSCI Inc. from including Chinese shares to benchmark indexes in its review, it will be the overuse of trading halts.
goo.gl/bPsJzE

Pray That China’s Faking It
David Fickling – Bloomberg
The extraordinary run-up in commodities over recent weeks has led to fears that a flood of Chinese investors has floated materials prices away from their moorings in reality.
goo.gl/Fo1w7H

China’s Improbable Commodities Frenzy Leaves Stocks in the Dust
Sarah McDonald, Richard Frost – Bloomberg
Eggs to cotton and steel surge as speculators pile in; Equity market turnover is back to levels not seen since 2014
The wild ride in China’s commodity futures is making the nation’s $5.9 trillion stock market look docile.
goo.gl/CVzVgw

Japan’s Money Partners Group Invests $450k in Bitcoin Exchange
newsbtc.com
It is not the first time the name Money Partners Group (TYO:8732) is used in combination with the Bitcoin industry. Just last month, the forex brokerage invested in Payward – who operate the Kraken exchange – for an undisclosed amount. Earlier today, the company announced they will also invest in TechBureau, the parent company of Japanese cryptocurrency exchange Zaif.
jlne.ws/1QS3mfh

Japan Finance Minister Fires Off Again on Yen-Trading Concerns
Jodi Schneider, Alessandro Speciale – Bloomberg
Aso: Japan will monitor speculative trades, respond as needed; Appreciation to 18-month high seen undermining inflation
Japanese Finance Minister Taro Aso extended his verbal campaign of expressing concern about his nation’s exchange rate after the yen jumped to an 18-month high.
goo.gl/m8O5DK

China Plans to Streamline Procedures for Cross-Border Gold Trade
Bloomberg News
Move to cut paperwork and speed up imports, analyst Jiang says; Single permit may be used in repeated shipments: central bank
China, the largest gold producer and consumer, is simplifying procedures for cross-border trade, a move that may speed up imports.
goo.gl/5OUqP1

Frontier Markets

Mountain of Tin Draws Investors to World’s Biggest Untapped Site; Alphamin braves armed groups and remote location in Democratic Republic of Congo.
Thomas Wilson – Bloomberg
As a chartered helicopter lifts off from the edge of Lake Kivu in Democratic Republic of Congo, villages and farmland quickly turn to verdant hills that stretch out as far as the eye can see. An hour of flying over dense jungle ends at a small tented camp perched on a hillside. “Welcome home,” reads a hand-painted sign.
goo.gl/9Eb8fL

Are Frontier Markets the ‘New’ Emerging Markets?
ThinkAdvisor
Fresh out of business school in 1995, I joined Montgomery Asset Management, a firm that was among the earliest to invest in emerging markets. Emerging markets were considered a high-risk segment of the investment universe, avoided by many investors based on concerns about immature economies, illiquid stock exchanges and uneven respect for property rights.
jlne.ws/1WIbNRk

Miscellaneous

U.S. Farmers Open Up Silos as Corn Hits `Magic’ Price Levels
Shruti Singh, Jeff Wilson – Bloomberg
Dry weather in Brazil sparked rally for grain futures; Prices topping $4 `triggered a lot of activity,’ CHS says
The best rally for corn prices in 10 months meant U.S. farmers were frantic to sell from the mountain of grain they’d been hoarding.
goo.gl/3gpuM0

Pin It on Pinterest

Share This Story