First Read

Disruption is Not Innovation
By Dr. Holly Bell
Prior to 1975, stocks often traded at different prices on different venues making it difficult for traders to find the best market prices. To resolve this problem, the SEC began its pursuit of a national market system, which has experienced several revisions over time. As market technology evolved, markets became increasingly automated and fragmented prompting the SEC to implement Regulation National Market System (Reg NMS) in 2005 to modernize and strengthen markets through improved dissemination of market information, reduced technical problems, and better price synchronization across exchanges.
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*****Holly Bell is a finance, economics and business administration professor at the University of Alaska and part of the affiliated scholar networks at CATO Institute and Mercatus Center at George Mason University.

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ICDA/SFOA Chair Daniel Day-Robinson Running for the Sea
By Daniel Day-Robinson – ICDA
I am a very unlikely marathon runner but I am hoping you will support me in my bid to complete the London Marathon on 24th April in aid of a very worthy charity. Please visit my Just Giving page here and support my fundraising for ‘those in peril on the sea’ – something close to my heart as I have always been in the commodities industry and there are many merchant seafarers who have troubles and distress

I am raising money for the Sailors’ Society, which is a charity supporting merchant seafarers. The Sailors’ Society wants to make sure their seafarers’ voices are heard, their troubles listened to and their needs are met and is an international Christian charity working in ports around the world where the need is greatest. Their network of chaplains come alongside seafarers on ships and in ports to provide Christian ministry, welfare care and practical support. There are many men and women who work in international shipping without a lot of the support we take for granted onshore. Without them what would our daily shop from the local convenience store look like? I am also supporting this cause because much of my career has been in the international commodities trade and finance sector which could not thrive without the important work of merchant seafarers.

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Hamilton the Musical is a Market Obsession
John Lothian – JLN
Since I first heard of Hamilton the musical I have wanted to see it. So have my kids. And my staff. I am a big Alexander Hamilton fan. There is a lot of demand to see this Broadway musical, and I confess that seeing it has become an obsession of mine. I was advised recently that I have included a few too many Hamilton references in the newsletter, and that I should concentrate more on the important issues of the day – market structure, market regulation, algorithmic trading, listed versus OTC markets, futures and options.
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***** My column on Hamilton the musical was received very well on Friday.

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2016 Exchange CEO Series: LME’s Garry Jones Looking At More Metals, More Clearing and More China
JohnLothianNews.com

Last year represented the first full year in which London Metal Exchange was under the Hong Kong Exchanges & Clearing umbrella. Now the exchange is looking forward to expanding through new products, users and via its relatively new clearing house, LME Clear.

The LME battled some major commodity headwinds in 2015, with metals prices falling anywhere from 25 to 45 percent, and many firms pulling out of the market due to risk concerns, mine closures and various mining and banking staff reductions. LME’s volumes dipped 4.3 percent in 2015 to 169 million, down from 177 million a year earlier.

“Against that background, we ended up doing pretty well,” said LME CEO Garry Jones, who spoke with JLN at the FIA Boca conference. “We changed our pricing schedule to a more commercial level, fully in-sourced all the technology, and had a full year of LME Clear.” Watch the video »
***DA: In case you missed any of this year’s CEO Series from Boca, here they are: CME’s Gill Looking For Customer Efficiencies, Part One and Part Two, Jeff Sprecher Talks Data, Clearing and Growth for ICE, LSE’s David Weisbrod Talks Clearing And Openness, Hong Kong’s Charles Li Looks To Keep Building Bridges To China, SGX’s Boon Chye Expanding With New Products, New Platform in 2016

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Advantage Futures Proudly Introduces Its Economist Series
Advantage Futures
In this growing collection, noteworthy economists periodically share their thoughts across a wide range of market related topics serving to educate and inform traders.
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***** They have all kind of economists, those with one hand, those with two hands and even those with three hands.

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How Chicago’s top trading tech firms are shaping the future of finance
Built In Chicago
Technology has found a veritable home in the financial market, spurred in part by disruptive tech companies that for the past couple of decades have brought increasing levels of innovation, efficiency, and transparency to an industry once dominated by strictly physical exchanges. As these fintech hybrids continue to prove their worth (in terms of market presence, trade volume, VC-backing, and integration of their tech-powered and data-driven tools), open markets are in the midst of a tech revolution. We talked with four Chicago companies at the epicenter of trading technology innovation to learn more about the tech they’re building and how it’s shaping the future of finance.
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***DA: Spoiler alert: the four featured firms are Optiver, Trading Technologies, Topstep Trader and DRW. That’s quite a lineup.

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In Iowa corn fields, Chinese national’s seed theft exposes vulnerability
BY JULIA EDWARDS – Reuters
Tim Burrack, a northern Iowa farmer in his 44th growing season, has taken to keeping a wary eye out for unfamiliar vehicles around his 300 acres of genetically modified corn seeds.
goo.gl/YfSJq6

**JK: Computer hacking, what’s next, corn hacking? Why, yes.

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American exceptionalism: the great game and the noble way
By Ben Fountain
Election season is a carnival of boastful patriotism but we ought to be uneasy about triumphal rhetoric. America has done many great things and many monumentally terrible things – always in the name of doing good
If you want to see a bunch of happy Americans, go out to opening day at any baseball stadium in the land. Pretty much any day is a good day to go to the ball park, but that first day of the season is special. It’s spring. The grass is green. Pessimism is impossible, at least until the other team scores.
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***** Baseball, elections, this article has it all

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10 Crazy Things People in Finance Believe
by Ben Carlson – AWealthofCommonSense.com
Finance can be a very backwards industry. I understand why so many people outside the world of finance don’t understand what it is that goes on in our industry because many of the things that people believe or do just don’t make any sense. Here are ten of them:
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***** What are the crazy things you believe?

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Bridging the Week by Gary DeWaal: April 4 – 8, and 11, 2016 (OCR; Spoofing; Me-Too Enforcement Actions; ATS Gone Wild; Leverage Ratio)
By Gary DeWaal, Katten, Muchin Rosenman LLP
Two non-US residents settled a civil enforcement action by the Commodity Futures Trading Commission alleging that they engaged in spoofing activity by agreement to pay an aggregate fine of US $2.69 million, while a third individual’s recent criminal conviction for spoofing was not set aside by the relevant court, despite his motion for such relief. Separately, staff of the CFTC once again delayed effective dates for obligatory electronic filings under its new Ownership and Control requirements; clarified definitions of owner and controller; and provided some interim relief on the effective dates of certain other specific requirements of reporting entities. As a result, the following matters are covered in this week’s edition of Bridging the Week:
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***** What is Monday without Gary DeWaal?

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GMI-Blockchain Conference
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Friday’s Top Three
The week ended with our top story being a good old family drama in the story The Unraveling of a Wall Street Scion. The second most read story sees yet more exchange news, BM&F Bovespa sells CME stake ahead of planned Cetip purchase. Last but certainly not least is one of our very own showing the similarities of buying a popular ticket to a Broadway show to trading in the article by John Lothian, Hamilton the Musical is a Market Obsession

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MarketsWiki Spotlight
IOMA: WFE’s Clearing & Derivatives Conference, 17-19 April, Kuala Lumpur, Malaysia

The World Federation of Exchanges represents 64 regulated exchanges across the world, and acts on behalf of a total of 99 organizations including affiliate members and clearinghouses.

WFE-IOMA 2016

The WFE’s IOMA conference brings together clearinghouses, exchanges, regulators and other stakeholders from around the world to discuss the key market structure and business issues of the day. The focus of the 2-day annual conference is post-trade and derivatives market issues. For more on the WFE, visit its page in MarketsWiki HERE

***Also see this month’s WFE e-zine, hot off the presses.
This month’s theme is post-trade, with some of our members sharing their views on the big post-trade themes as they see them. Comments include distributed ledger, the supplemental leverage ratio, further regulation and further clearing initiatives.

“Spotlight”
is brought to you by:
MarketsWiki

 

Lead Stories

LSE’s Rolet Strikes Back at Reports Company Would Be Dismantled
John Detrixhe – Bloomberg
ICE said to consider selling Milan-based stock exchange; ESMA ruling could weaken Deutsche Boerse’s business model
Xavier Rolet lashed out at Intercontinental Exchange Inc., which is mulling whether to bid for his London Stock Exchange Group Plc, in a round of British newspaper interviews last week. He says it was a response to reports that ICE would dismantle the company he’s been running since 2009.
goo.gl/fKZDXU

BM&FBovespa to Buy Clearing House Cetip After Two Failed Bids
Denyse Godoy – Bloomberg
Bourse to pay 30.75 reais/share plus BM&FBovespa stock; Cetip shareholders would have about 12% stake in exchange
BM&FBovespa SA, the operator of Latin America’s biggest securities exchange, will buy Brazilian clearing house Cetip SA to strengthen its presence in the region.
goo.gl/jRuLX1

Think tanks warn of bonus and job cuts in City of London; IPO listings fall by more than half
City of London
Laura Dew – InvestmentWeek
City workers have been warned of an upcoming period of market difficulty and economic malaise which could lead to job losses and a “collapse” in bonus payments, in a series of reports by economic think tanks.
goo.gl/iRCu5R

Miserable Year for Banks: Stocks Suffer as Rates Stay Low;
Financial shares are down sharply in 2016 even as broader markets have recovered; central-bank policies squeeze interest margins
By AARON KURILOFF in New York and RIVA GOLD in London f- WSJ
Bank stocks are having a terrible 2016, as central-bank policies, which for years lifted asset prices, are hurting the financial sector.
goo.gl/tGn43e

Wall Street Wages Double in 25 Years as Everyone Else’s Languish
Jennifer Surane – Bloomberg
Trump, Sanders capitalize on Main Street anger over pay gap; Bankers earned five times average for rest of U.S. in 2014
Dear Wall Street: Stop complaining about your pay. Five years after Occupy Wall Street protesters took over Zuccotti Park in downtown Manhattan, spawning a national discussion about the divide between America’s highest and lowest earners, the pay gap has only gotten wider. Now, even as bankers bemoan their declining bonuses and job prospects, it’s helping fuel the campaigns of Donald Trump and Bernie Sanders.
goo.gl/x58GNi

Interview With Keith Ross: Masters in Business (Audio)
Bloomberg
Bloomberg View columnist Barry Ritholtz interviews Keith Ross, chairman and chief executive officer of PDQ Enterprises LLC. He brings more than 35 years of experience in the securities industry to PDQ. Prior to joining PDQ as CEO in 2006, Mr. Ross was the CEO of Getco from 2002-2005. This interview aired on Bloomberg Radio.
goo.gl/pVMWWI

Australia’s big banks wander deeper into regulatory quagmire
BY SWATI PANDEY – Reuters
Australian banks famously rode out the 2008 financial crisis with barely a scratch, but no longer are they the exemplar of success, as a commodity rout ravages the economy and a growing storm of accusations over misconduct threatens to tar their name.
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China to open up iron ore futures to foreign investors
Reuters
China is planning to open up the world’s most liquid iron ore futures to overseas investors, an official with the Dalian Commodity Exchange said on Friday, a move that would increase China’s sway over pricing as the world’s top iron ore consumer.
goo.gl/mYzr45

Argentina launches bond comeback roadshow
Eric Platt in New York and Benedict Mander in Buenos Aires – FT
Investor interest in a multibillion dollar bond offering from Argentina has reached a zenith as the Latin American sovereign, sidelined from global debt markets since its 2001 default, launches a five-day marketing tour across the US and UK.
goo.gl/7bBmOI

Are fintechs helping banks evolve – or planning a revolution?
Jon Card – The Guardian
New regulations are dragging finance into a digital world. Fintech startups are taking advantage but are they disrupting the old guard or helping them into the digital era?
Delegates at the recent Money2020 Europe conference in Copenhagen are under no illusions that the financial sector is rapidly changing. Recently, there’s been an explosion of new technology companies entering finance – commonly known as fintechs.
goo.gl/rsVD74

The stuff that makes for great bourses
by Goh Eng Yeow – Straits Times
When the Singapore Exchange (SGX) made its abortive A$8.4 billion bid for the Australian Stock Exchange in 2010, the local operator was valued at S$10.2 billion.
goo.gl/nsfk9A

Why Europe’s Banks Don’t Have Enough Capital
By Mark Whitehouse – Bloomberg View
Europe’s economic malaise has a lot to do with its crippled banking system. Making that system more fragile seems like the wrong way to address the issue.
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The case for more capital
Matthew C Klein – FT
Back when the Basel III regulations were being debated in the wake of the crisis, it was common to hear dire warnings that rules limiting how much banks can borrow would constrict lending and lower real output. Even some who ostensibly support higher equity capital requirements think there are “trade-offs” between a safer financial system and economic growth.
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U.S. judge orders deposition of Bernard Madoff
BY JONATHAN STEMPEL – Reuters
Bernard Madoff must submit to a deposition by lawyers for some former customers who lost money when the imprisoned swindler’s firm collapsed in December 2008, a judge ordered on Friday.
goo.gl/0HPB0T

Lessons from recent market turbulence
Gavyn Davies – FT
Financial asset prices have been on a roller coaster in 2016. In mid-February, gloom was pervasive and global equities were down about 10 per cent year to date. Then came a sudden rally, wiping out all of the losses in the US equity market, but not in the eurozone market, and especially not in the Japanese market, which fell further.
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‘Mad Punter’ says he was in the dark about law on spreading false tips
Caroline Binham – Ft
A day trader known as the Mad Punter has told a London court he had no idea disseminating false rumours in the market could amount to a criminal offence.
goo.gl/YVoIri

Regulatory

Q&A With Christine Lagarde: Finance’s Firefighter Wants to Be Its Architect
By John Micklethwait – Bloomberg Markets
With so many financial markets driven by the utterings of central bankers, the words of the woman who is in effect the central banker’s central banker matter enormously. Christine Lagarde, 60, who is about to begin her second five-year term as head of the International Monetary Fund, has a remarkable résumé. She had already run Baker & McKenzie, one of the world’s biggest law firms, and served as France’s finance minister before joining the IMF in 2011.
goo.gl/jJHLLT

Basel Committee proposes easing leverage ratio on derivatives
Out-Law.com
The Basel Committee on Banking Supervision has proposed changes that could reduce the amount of capital that banks are required to hold from January 2018.
goo.gl/j6pzxc

UK competition watchdog opens inquiry into Tullett Prebon – ICAP deal
Maria Nikolova – Leaprate
The UK Competition and Markets Authority (CMA) today announces the opening of an inquiry into the planned deal between ICAP plc (LON:IAP) and Tullett Prebon Plc (LON:TLPR).
/goo.gl/ctzzKv

Ex-BlackRock manager’s new venture gets nod from FCA
By Mark Cobley – Financial News
Andrew Williamson-Jones, a senior portfolio manager on $1.6 billion of global equity funds at BlackRock until 2012, has received authorisation from the Financial Conduct Authority for his new venture, Halo Investment Management.
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Financial Conduct Authority closes in on ‘closet tracker’ funds
Madison Marriage and Attracta Mooney – FT
The UK regulator has uncovered serious problems in how asset managers sell funds to investors, highlighting particular issues around products that are marketed as actively managed when they in fact closely follow a benchmark.
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Clifford Chance comes out against Brexit
Lindsay Fortado – FT
In a rare move for a top law firm Clifford Chance’s management has taken a stance on a political question: coming out in favour of Britain remaining in the EU.
goo.gl/uXaAHo

CFTC’s Division of Market Oversight Issues Further Actions Concerning Implementation of the Ownership and Control (OCR) Final Rule
CFTC
The U.S. Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight (DMO) today issued a no-action letter (CFTC Letter No. 16-32) and related guidance regarding the ownership and control final rule (OCR Final Rule). The OCR Final Rule requires the electronic submission of trader identification and market participant data on new and updated reporting forms.
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Self-Regulatory Organization (SRO) Rulemaking and National Market System (NMS) Plans
SEC

    • BATS: Notice of Filing of Amendment No. 1 and Order Approving on an Accelerated Basis a Proposed Rule Change, as Modified by Amendments No. 1, No. 2, and No. 3, to List and Trade Shares of the SPDR DoubleLine Emerging Markets Fixed Income ETF of the SSgA Active Trust (Release No. 34-77567; File No. SR-BATS-2015-94)

 

    • BOX: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Amend the Fee Schedule on the BOX Market LLC (BOX) Options Facility (Release No. 34-77572; File No. SR-BOX-2016-14); see also Exhibit 5

 

    • BOX: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Amend the Fee Schedule on the BOX Market LLC (BOX) Options Facility (Release No. 34-77568; File No. SR-BOX-2016-15); see also Exhibit 5

 

    • CBOE: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to SPXPM Pilot Program (Release No. 34-77573; File No. SR-CBOE-2016-036)

 

    • CBOE: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Rule 6.1A (Release No. 34-77570; File No. SR-CBOE-2016-028)

 

    • FINRA: Order Approving a Proposed Rule Change to Reduce the Synchronization Tolerance for Computer Clocks that are Used to Record Events in NMS Securities and OTC Equity Securities (Release No. 34-77565; File No. SR-FINRA-2016-005)

 

    • ISEMercury: Notice of Filing of Proposed Rule Change Related to Market Wide Risk Protection (Release No. 34-77569; File No. SR-ISEMercury-2016-07); see also Exhibit 5

 

    • NYSE Arca: Notice of Designation of a Longer Period for Commission Action on a Proposed Rule Change, as Modified by Amendment No. 1, to List and Trade of Shares of RiverFront Dynamic US Dividend Advantage ETF and RiverFront Dynamic US Flex-Cap ETF under NYSE Arca Equities Rule 8.600 (Release No. 34-77571; File No. SR-NYSEArca-2016-28)

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Exchanges & Trading Facilities

New DelphX ATS Data to Boost CDS Liquidity; DelphX says its planned ATS for Default Swap Receipts will increase the quality of pricing and liquidity in CDS markets.
Faye Kilburn – Waters Technology
Corporate bond trading platform operator DelphX is developing a regulated alternative trading system for trading a new securitized form of credit default swap protection known as Default Swap Receipts (DSRs) that will provide greater price transparency and “restore liquidity” to single-name CDS markets, officials say.
goo.gl/ZqfguQ

Euronext announces detailed dividend payment schedule for 2016
Euronext
Euronext today announced its dividend payment schedule for 2016.
/goo.gl/mcZYPH

Euronext says working on Black Sea wheat futures; CBOT as world wheat price driver is declining; U.S. farmers increasingly turn to corn, soybean; Black Sea, EU production swings become big price drivers
By Sybille de La Hamaide – Reuters
The rising influence of Black Sea markets on world prices prompted Euronext to start working on developing futures contract that would allow price hedging in one of the world’s largest export zones for the grain, it said on Friday.
goo.gl/gTl5IJ

LSE’s Rolet: No post-deal sell-off for French, Italian units
By Tim Cave – Financial News
Xavier Rolet has nursed the London Stock Exchange Group back to health in part through a series of shrewd acquisitions. He doesn’t want his crowning deal – a merger with Deutsche Börse to create a pan-European market infrastructure giant – to unpick that legacy.
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CME Group CEO Phupinder Gill’s FY 2015 total compensation $4.9 mln
Reuters
CEO Phupinder Gill’s FY 2015 total compensation $4.9 million versus $5.4 million in FY 2014 – SEC filing Source
goo.gl/un24Ac

Technology

UK competition watchdog hits out at Three-O2 deal
Christian Oliver in Brussels and Daniel Thomas in London – FT
The UK’s competition watchdog has piled the pressure on regulators in Brussels to block CK Hutchison’s £10.5bn acquisition of UK mobile operator O2, by arguing that the proposed deal would harm British consumers.
goo.gl/qoFcFc

Axoni, DTCC, Markit, and major banks complete blockchain test
Automated Trader
Seven firms have announced the successful test of blockchain technology and smart contracts to manage post-trade lifecycle events for standard North American single name credit default swaps (CDS). The initiative demonstrated that the complex events inherent to CDS, including payments, amendments, novations and compressions, can be efficiently managed on a blockchain in a permissioned, distributed, peer-to-peer network.
goo.gl/Ved26K

Congratulations! You’ve Been Fired
By DAN LYONS – NY Times
AT HubSpot, the software company where I worked for almost two years, when you got fired, it was called “graduation.” We all would get a cheery email from the boss saying, “Team, just letting you know that X has graduated and we’re all excited to see how she uses her superpowers in her next big adventure.” One day this happened to a friend of mine. She was 35, had been with the company for four years, and was told without explanation by her 28-year-old manager that she had two weeks to get out. On her last day, that manager organized a farewell party for her.
goo.gl/XiiZbq

Dubai International Financial Centre Data Centre First In The UAE To Receive Management And Operations Stamp Of Approval From Uptime Institute
Mondovisione
The Dubai International Financial Centre (DIFC) Co-Location Data Centre has become the first data centre in the UAE to receive the internationally recognized Management and Operations (M&O) Stamp of Approval from Uptime Institute, the leading, unbiased standards and Certs organization for the data center and IT infrastructure.
goo.gl/dSyG18

Politics

Look to Wall Street to find out who our next president will be
By Jonathon M. Trugman – NY Post
Next week is primary week in the capital of the world, New York. All of the candidates are here, but they are staying far away from Wall Street because none dares to acknowledge the economic models that have an almost perfect record predicting presidential political outcomes.
goo.gl/Kcxg6z

If Bernie Sanders Wants To Break Up The Big Banks Why Not Do It The Simple Way, That Works?
Tim Worstall – Forbes
Opinions expressed by Forbes Contributors are their own.
I’m not greatly enamoured of Bernie Sanders and his approach to public policy. Not that that’s any great surprise to anyone I would think. His reaction to whatever the situation or problem is always seems to devolve to our need for more government.
goo.gl/2sccWu

Hedge Funds & Managed Futures

Opinion: How your stock fund can lose money and still stick you with a tax bill; Mutual funds’ year-end payouts can add insult to injury
By CHUCK – MarketWatch
George S. in Puyallup, Wash., didn’t realize how poorly his mutual fund did last year until he was preparing his annual tax return and checked the results, expecting to see something good.
goo.gl/2O7J1H

Ruffer: The challenge of coping with ‘manic depressive’ markets; Two key factors
Jayne Rana – InvestmentWeek
Hamish Baillie and Steve Russell, managers of the Ruffer Investment Company, have addressed the difficulty of positioning the portfolio to cope with the “manic depressive nature” of current markets.
goo.gl/dL9SxH

BlackRock’s Larry Fink warns negative rates could hit spending
Stephen Foley in New York and Shawn Donnan in Washington – FT
Negative interest rates risk hitting consumer spending and undermining the economic growth they are intended to encourage, the head of the world’s largest asset management group has warned.
goo.gl/9LjB2a

The $1 Trillion Short Underlying Stocks’ Spring Awakening
Dani Burger – Bloomberg
Short interest reaches highest level since 2008 despite gains; Level is contrarian bullish, sets up powerful rally, says BofA
Skepticism is one thing this rally hasn’t lacked.
goo.gl/hg64m3

Banks & Brokers

Millennial Employees Confound Big Banks; To stem departures, firms tweak their delayed-gratification models
By DANIEL HUANG and LINDSAY GELLMAN – WSJ
Entry-level bankers from Goldman Sachs Group Inc. gathered in a lower Manhattan hotel ballroom last April to listen to the firm’s top executives try to fire them up about their budding careers. David Solomon, co-head of the firm’s investment bank, took on the touchy subject of young employees leaving for private-equity jobs.
goo.gl/ug6uNG

Lloyd Blankfein explains a new strategy at Goldman that’s great news for young people
Portia Crowe – Business Insider
Goldman Sachs has found a way to cut costs without reducing its employee headcount — and it’s good news for young people.
goo.gl/X11iUo

Italy readies multi-billion euro rescue fund to prop up ailing banks; Greece struggles to meet bailout conditions
Daniel Flynn – InvestmentWeek
Italy is finalising plans for a new rescue fund worth billions of euros, in a bid to support its ailing banks and prop up its struggling economy.
goo.gl/TV4hvH

Banks fight demand for billions in capital to cover fund arm losses
By Elizabeth Pfeuti – Financial News
Banks are up in arms about a proposal “out of the blue” that they should hold billions of dollars of extra capital in case their fund management operations are hit in a crisis.
goo.gl/f1Z15I

Banks accept thumbprints and selfies as they chase millennials
Emma Dunkley – FT
On the bus to work at 7.30am, most commuters are half asleep, but 26-year-old Henrietta Hunter is doing her banking over her mobile phone.
goo.gl/phoUet

Societe Generale headquarters searched in Panama probe
Reuters
French tax police searched Societe Generale’s (SOGN.PA) headquarters this week as part of an investigation into offshore accounts revealed by the Panama Papers, the bank said on Sunday.
goo.gl/zTKqDv

BGC hires former Eagle Seven COO to boost algo offering; Troy Kane joins the interdealer broker as head of algorithmic client development and strategy.
By Joe Parsons – The Trade
Interdealer broker BGC Partners has hired former chief operating officer of proprietary trading firm Eagle Seven to boost its algorithmic trading business.
goo.gl/YVlVLy

Libor case banker did as he was told, lawyer says
By Jane Croft – FT
A former Barclays banker accused of conspiring to manipulate a key interest rate benchmark is in the dock for “doing what his boss told him to do and taught him to do”, a court has heard.
goo.gl/XQKqyJ

Clearing & Settlement

LCH.Clearnet wins Japan clearing mandate; Swaps clearing approval seen as major part of integration of LCH.Clearnet’s Asian operations.
By Joe Parsons – The Trade
LCH.Clearnet has won regulatory approval to clear non-Yen interest rate swaps for Japanese banks.
goo.gl/Zol1Mv

Indexes & Products

Keep smart beta smart: Sequential tilting of multiple factors
FTSE Russell
FTSE Russell’s 2015 Smart Beta survey found that among respondents who were evaluating more than one smart beta strategy, over half shared the same objective: to understand how the strategies worked in combination. To help explain this, we’ve recently explored the effects of combining factors in indexes and found that there are smart—and not-so-smart—approaches. We’ve identified sequential tilting as an effective approach, as it can offer multiple factor exposures without diluting the index diversification.
goo.gl/BRxpco

Eurex Exchange’s Q1/2016 MSCI news
Eurex
It is not unsurprising that the first 2016 quarterly expiry combined with volatile global markets delivered record volumes for Eurex MSCI Derivatives.
goo.gl/ynFY52

Advisers Swap Active Funds for Smart Beta ETFs
Morningstar
Strategic-beta exchange traded funds, also known as “smart beta” ETFs, are set to capture a bigger share of European investors’ portfolios, according to the latest survey of European investment professionals carried out by EDHEC-Risk Institute.
goo.gl/pukgnf

Why Facebook is the Dow’s $323 billion omission
Bloomberg via Crain’s Chicago Business
It’s the sixth-largest U.S. company, the fastest ever to reach $250 billion in value, with revenue that has quintupled in four years. And yet Facebook Inc. isn’t in the Dow Jones Industrial Average. Why not?
goo.gl/foZMnl

Enforcement

Wells Fargo reaches $1.2 bln U.S. mortgage settlement
Reuters
Wells Fargo & Co has formally reached a $1.2 billion settlement to end a U.S. Department of Justice lawsuit accusing it of knowingly deceiving the federal government into insuring thousands of risky mortgages.
goo.gl/cDaEfJ

Environmental & Energy

U.S. shale oil firms feel credit squeeze as banks grow cautious
BY SWETHA GOPINATH AND DAVID HENRY – Reuters
Nearly two years into an epic oil rout, U.S. shale drillers that have upended global energy markets are finally feeling a credit squeeze as banks make their biggest cuts yet to their loans.
goo.gl/YMhlTI

Nations seek rapid ratification of Paris climate deal, four-year lock
By Alister Doyle – Reuters
Many nations are pushing for swift ratification of a Paris agreement to slow climate change and lock it in place for four years before a change in the White House next year that might bring a weakening of Washington’s long-term commitment.
reut.rs/1Saxd9S

Tata Steel windfall from carbon emissions permits
By Roger Harrabin – BBC News
Tata Steel is refusing to comment on claims it has made £700m windfall profits from a policy designed to protect the climate.
bbc.in/1Wm0PRw

Asia-Pacific

Why banking in India will never be the same again
Livemint
Last week, the focus was on the change in the Reserve Bank of India (RBI)’s stance on liquidity and the cut in its benchmark policy rate and many of us overlooked the structural changes in the banking industry architecture that the Indian central bank had hinted in its first bi-monthly monetary policy for fiscal 2017. If RBI is serious about it, banking in India will never be the same again.
goo.gl/N0UMfh

BlackRock Joins $46 Billion Japan Pullout
Anna Kitanaka, Toshiro Hasegawa, Nao Sano – Bloomberg
For global equity investors and Shinzo Abe, it’s splitsville.
goo.gl/SajxM0

Huatai teams up with Fidessa for OMS; Huatai Financial Holdings is the tenth Chinese broker to join Fidessa’s OMS.
By Hayley McDowell – The Trade
Huatai Financial Holdings has signed up for Fidessa’s order management system (OMS) as plans for its expansion into Hong Kong proceed.
goo.gl/tG2UZD

China’s Missed Opportunities to Kill Zombie Companies; Flurry of defaults may just be a list of companies Beijing decided aren’t important enough
By ANJANI TRIVEDI – WSJ
A rising tide of defaults is typically the start of a deep cleanse, a purge of the weak companies, and the emergence of over-indebted ones. In China, a recent flurry of defaults may just be a list of companies Beijing decided aren’t important enough.
goo.gl/lMejp2

Frontier Markets

South African Banks Moving To Invest In Blockchain Technology
AFKInsider
Large South African companies and banks are beginning to experiment with blockchain technology as a way to streamline processes, saving time and money.
“In 2015, we saw all the big banks in South Africa starting to engage on blockchain and what we foresee for 2016 is an aggressive move to investment in blockchain applications,” Dominique Collett, Rand Merchant Investments senior investment executive, told ITWeb.
goo.gl/Ex6iBg

NSEL scam: Whiff of black money
Times of India
As a multi-agency probe continues in the Rs 5,600-crore NSEL payment fiasco, investigators have come across fresh evidence suggesting routing of black money by sister concerns and associates of various brokers who had traded on the platform of the spot exchange.
goo.gl/eIqUDH

NSEL Scam: Bombay HC panel charges brokers with mis-selling of products
Business Standard
With the High Court Committee (HCC) appointed by the Bombay High Court recommending audit of books of leading brokers in the Rs 5,600-crore National Spot Exchange Ltd (NSEL) scam, suspicions are being raised over brokers’ role in commodity trading at the now-defunct spot commodity trading exchange. Trade sources do not deny the involvement of black money into the system.
goo.gl/QKCRuu

Why Hedge Funds Are Loading Up on Rubles
Elena Popina – Bloomberg
Russia will give lucrative returns in `16, Stone Harbor says; Currency gained most in emerging markets since January low
Managers of some of the best-performing funds from Berlin to New York are buying Russian ruble assets as the currency has rebounded 23 percent from a record low.
goo.gl/NTd62i

India seen losing favour among global investors; Most sought-after market of the past few years doesn’t feature among top bets in Asia, emerging markets
Samie Modak – Business Standard
High relative valuations amid weak earnings delivery is costing India its earlier tag of most-preferred destination among Asia and emerging markets (EMs).
goo.gl/3adNyh

Banks delay action against nearly 100 corrupt officers; As per norms, matter of granting sanction for prosecution has to be decided within four months
Business Standard
Public sector banks have delayed action against nearly 100 corrupt officers despite the uproar over cases of bank fraud and non-performing assets, according to a CVC report.
goo.gl/il4cU3

Miscellaneous

The Rich Live Longer Everywhere.; For the Poor, Geography Matters.
By NEIL IRWIN and QUOCTRUNG BUI – NY Times
For poor Americans, the place they call home can be a matter of life or death.
goo.gl/OOHUcG

We Need a Sequel to The Big Short to Critique Public Pensions; How public unions are driving another economic bubble.
Ed Ring – Reason.com
The Big Short is clearly a hit. Nominated for (and winning) a host of major awards, the film has reportedly clocked $131 million worldwide on a $28 million production budget.
goo.gl/Mc9Q61

UK publishers look to consolidate in print battle
Robert Cookson – FT
On Sunday, Johnston Press completed a deal that has puzzled many observers of the UK’s shrinking newspaper industry.
goo.gl/fbkIV0

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