First Read

Rocktoberfest from A Leg to Stand On is close at hand
JohnLothianNews.com
A Leg To Stand On is a non-profit that provides free prosthetic limbs and corrective surgery to children in developing countries who have lost their limbs in traumatic accidents or suffer from congenital limb disabilities. ALTSO’s annual fundraising benefit, Rocktoberfest Chicago, is moving into its 3rd year after having originated 11 years ago in New York. Rocktoberfest unites leaders from the finance industry for a night of Rock & Roll music performed by industry professionals. Rocktoberfest Chicago will be held on October 8th at City Winery. Hedgefund Rocktoberfest in New York will be on October 22 at Capitale.

Watch the video »

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The Chicago Cubs, My Ethics and MarketsWiki Education and a World of Opportunity
John Lothian
As many of my longtime readers may recall, I am a lifelong Chicago Cubs fan. You have not read much about this for several years as I have not had much to crow about for a long time.

Longtime readers will also remember that I once wrote that every man has his price and that mine is tickets to a Chicago Cubs World Series game. I have not had to worry about sacrificing my ethics since the 2003 season when the Cubs were five games away from their first World Series since 1945.

The Chicago Cubs this year find themselves in a familiar position, last place in their division and one of the losingest teams in baseball. August was a bright spot with a 16 win and 13 loss record, but the rest of the year was pretty dim.

Near the end of this season, though, there are glimmers of hope. The Cubs have brought up some young heralded players from their minor leagues who seem to have the potential to help turn the team around from their losing ways. Their rookie pitcher Kyle Hendricks, brought up after they traded former Notre Dame football player and now major league pitcher Jeff Samardzija, was just named pitcher of the month.

The 22-year old Cuban Jorge Soler, whom they signed a couple of years ago to a 9-year $30 million contract, has put up record batting numbers in his first seven games. Javier Baez, an infielder, hit a homerun in his first game as a Cub, something Soler did on the very first swing he took in the major leagues.

As you can see, I am starting to believe the Cubs are turning things around. They are doing this with rookies and young players, not has-beens who have bounced from team to team or high priced free agents. They have rebuilt their minor leagues into one of the best in baseball. I think the Cubs are building a good young team that can play together and compete for the next 10 years. We will see if they can ever get to the World Series and put my ethics at risk.

Now, what does all of this have to do with a media company focused on the markets? I believe the next generation of traders and industry professionals are the ones, just like the Cubs rookies, that are going to take this industry and these markets to the next level of success.

Read the rest on the JLN Blog at jlne.ws/1rF6wux

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‘Zoning’ plan takes aim at high-speed trading
Jeff Cox – CNBC
High-speed trading platforms would begin to look less like tangled webs of impenetrable computer fortresses and more like old-fashioned exchange floors under a plan put forth by an academic consortium.
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***** Such a naive view of the open-outcry world.

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CBOE Plans Trading on Government-Debt Volatility Index
Saumya Vaishampayan – WSJ
The CBOE Futures Exchange is readying plans to launch futures trading on a volatility index based on U.S. government debt. Futures trading on the CBOE/CBOT 10-year U.S. Treasury Note Volatility Index, under the symbol VXTYN, is expected to begin on Nov. 13, subject to regulatory review, and will allow users to hedge interest-rate volatility risk, the CBOE Futures Exchange said.
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***** Wait? There is volatility in government debt? Since when?

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Terry Duffy, president and executive chairman, CME Group – My Road and the Industry Challenge
JohnLothianNews.com

“Take a deep look at where you could possibly go…and if you don’t do that and take the near-sighted approach, you’ll be sorry.”

When starting your career, it’s best to think about where each opportunity can take you, rather than being envious of your peers. Terry Duffy, president and executive chairman of the CME Group gives a brief glimpse of how he entered the financial industry and addresses how his audience should utilize each opportunity they receive. One never knows where each job can take them; an entry-level position could one day lead to a top executive role. According to Duffy, we should not look at our careers in a “near-sighted” way, but instead look at long-term possibilities each job can eventually lead to.

Watch the video »

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Hedge Fund Blames High-Frequency Trading for Shutdown
Rob Copeland – WSJ
A hedge-fund manager says an unusual culprit contributed to his firm’s demise: high-frequency traders. Rinehart Capital Partners LLC, which had been backed by hedge-fund veteran Lee Ainslie and specialized in emerging-markets stock-picking, is closing, according to a letter viewed by The Wall Street Journal.
jlne.ws/1txZ1aN

***** It is not my fault, it was them I tell you. Those guys.

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Bigger Fines Against Wall St. Should Not Result in More Lawyers
GEOFFREY A. MOORE and MARK HARRIS – Dealbook – NY Times
Ineffectual grumbling about legal costs has been a fixture of the corporate landscape for decades. But now those costs – legal fees, settlements and related investments in the hiring of additional lawyers – are gutting the profits of the world’s largest companies, especially the big banks.
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***** Darn, and I was going to go to law school too.

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OIC Announces Three-Part Seminar Series Returns For Fall Season
The Options Industry Council (OIC) announced today its equity options seminar schedule for the fall season. The fall schedule will feature OIC’s three-part seminar series which debuted to great success this past spring. The fall lineup will also include OIC’s popular Advanced Strategies seminar and interactive Options Workshop.
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***** If it was four parts, they could sing in harmony.

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KCG Letter Claims ‘Open Rebellion’ Among Dissastified Employees
Scott Patterson – MoneyBeat – WSJ
Wall Street trading floors were abuzz this week after an anonymous letter circulated inside KCG Holdings Inc leaked out, revealing some severe tensions inside the computer-driven trading giant formed last year by the merger of high-speed king Getco LLC and Knight Capital Group Inc.
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***** I remember Knight under-performing a bit before the merger. Hmmm.

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MarketsWiki

MarketsWiki Page of the Day
Michael Bloomberg
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MarketsWiki Recent Updates

People

Daniel L. Doctoroff; Michael Bloomberg; Kimberly S. Taylor; Patricia Woertz; Sara Jean Goodman

Companies, Organizations and Groups

Borsa Istanbul; Fidessa group plc; G.H. Financials

Products

VIX

Statistics

52,607,005 pages viewed, 8,026 articles, 185,696 edits
MarketsWiki Statistics

Lead Stories

Barclays, BofA, Citigroup Sued for ISDAfix Manipulation
Bob Van Voris and Matthew Leising – Bloomberg
Barclays Plc (BARC), Bank of America Corp., Citigroup Inc. (C) and 10 other banks were accused in a lawsuit of conspiring to manipulate ISDAfix, a benchmark used to set rates for interest rate derivatives and other financial instruments.
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ICE looks to crack financial data market
Ed Hammond in New York – Financial Times
IntercontinentalExchange, the transatlantic exchange and clearing house operator, has agreed to acquire SuperDerivatives, an Israeli financial technology group, as it seeks to penetrate the lucrative information market.
jlne.ws/Wm8e7Y

BATS Global Markets In Search of New President
Bradley Hope – WSJ
BATS Global Markets Inc. has quietly begun searching for a new president just over a month after it forced William O’Brien out of the position, according to people familiar with the matter. After Mr. O’Brien abruptly departed BATS in July, BATS Chief Executive Joe Ratterman assumed the title of president “effective immediately,” according to a statement at the time.
jlne.ws/WlTRQZ

Century-old London gold price benchmark starts makeover
Reuters
The operator of the London gold price benchmark said on Thursday it formally started the process to find a new administrator for the century-old mechanism that will halt the telephone call that four institutions enter twice a day in favour of an electronic solution.
jlne.ws/Wm8yDG

Big banks must face U.S. swaps price-fixing lawsuit
Jonathan Stempel – Reuters
A Manhattan federal judge said on Thursday that investors may pursue a lawsuit accusing 12 major banks of violating antitrust law by fixing prices and restraining competition in the roughly $21 trillion market for credit default swaps.
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An unequal world is an uncharted economic threat
Gillian Tett – Financial Times
This week, the American economy won a little burst of applause. The World Economic Forum issued its latest report on which countries are considered to be creating “sustained prosperity” (that is, growth). America jumped to third place in the league table, behind Singapore and smug little Switzerland. This marks a rebound from the period after the crisis, when the US fell to seventh place.
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Born At the Wrong Time
David Weidner – MoneyBeat – WSJ
The generation we once called “slackers” has a new label: “debtors.” That might not sound surprising. After all, why wouldn’t someone who slacks off not end up in debt? The truth is that Generation X (the population born between 1965 and 1980) has grown up to be a economic engine
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Regulatory

Exclusive: U.S., Europe head toward delay in squabble over swaps rules – source
Douwe Miedema – Reuters
The European Union is discussing delaying a deadline for a second time in its efforts to reform the global derivatives market, a source familiar with the matter said, as talks with U.S. regulators have failed to produce a breakthrough on a main sticking point.
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Swaps Rule Requires $644 Billion in Collateral, Regulator Says
Silla Brush and Jesse Hamilton – Bloomberg
U.S. banks would need $644 billion in collateral to offset risks in swaps traded among themselves, according to an analysis of rules re-proposed by regulators.
jlne.ws/Wm3MpJ

Surge in FCA suspicious transactions reports
Paige Long – Risk.net
Reports of suspicious activity to the UK Financial Conduct Authority (FCA) are continuing to rise significantly. An average of 117 suspicious transactions per month are now being reported to the regulator, compared with just 28 per month five years ago – representing growing fears of non-compliance and higher penalties, according to London law firm Pinsent Masons.
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Between Bridges: CME Group Issues New Rule Regarding Disruptive Trading Practices
Gary DeWaal – Katten Muchin Rosenman
On August 29, the CME Group issued a new rule prohibiting certain disruptive trading practices that largely mirrors prohibitions in the Dodd-Frank Act. Most basically, the rule requires that all orders “must be entered in good faith for legitimate purposes.” In addition, CME issued 22 frequently asked questions and answers regarding prohibited and non-prohibited conduct, and nine non-exclusive examples of prohibited activity.
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Five risks weighing on Esma’s mind
Anna Irrera – Financial News
In its latest report on trends, risks and vulnerabilities in Europe’s markets, the European Securities Markets Authority yesterday highlighted issues that could cause instability. Here are five things that are keeping the watchdog awake at night.
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Fed’s Powell Renews Call for Benchmark Reform in Scandal’s Wake
Matthew Boesler and Christopher Condon – Bloomberg
Federal Reserve Governor Jerome Powell said regulators plan additional steps alongside market participants to change the way crucial financial benchmarks are calculated and promote the use of alternatives.
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Ex-BOE’s Tucker Says Bank Regulation Susceptible to Arbitrage
Rachel Evans – Bloomberg
Regulations that rely too heavily on rigid rules are doomed to fail as institutions will find ways to circumvent oversight, said Paul Tucker, former deputy governor of the Bank of England.
jlne.ws/Wm7aRt

IIROC names Andrew J. Kriegler As President And CEO
The Investment Industry Regulatory Organization of Canada (IIROC) yesterday announced the appointment of Andrew J. Kriegler as the incoming IIROC President and Chief Executive Officer. Mr. Kriegler will assume the position on November 1, 2014, and will also become a member of the IIROC Board of Directors at that time.
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FCA publishes update on PPI work – firms have improved complaints handling and are reopening two and a half million old complaints to ensure fair redress is paid
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[FCA] Retrospective application of regulatory rules: call for examples
We are asking for examples on retrospective application of regulatory rules.
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ASIC Chairman’s Travel Spending And Agenda
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Exchanges & Trading Facilities

CBOE Adds Weekly Options To The VIX Mix
Saumya Vaishampayan – MoneyBeat – WSJ
There’s a new ingredient in the sauce that makes up the stock market’s fear gauge. Chicago Board Options Exchange said Thursday it plans to include weekly S&P 500 options in its calculation of the CBOE Volatility Index. The change is scheduled to go into effect on Oct. 6.
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Intercontinental Exchange Reports ICE And NYSE Volume For August
ICE’s August average daily volume (ADV) for futures and options was 4.4 million contracts, down 11% compared to August 2013. In August, NYSE’s U.S. cash equities and options ADV declined 7% and 8%, respectively, year to year.
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NASDAQ OMX August 2014 Volumes
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BM&FBOVESPA Publishes August Market Performance
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Intercontinental Exchange Sets November 4 For Third Quarter 2014 Earnings Announcement
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BOX Options Exchange September 2014 InBOX
This is the September issue of InBOX, your news source from inside the BOX Options Exchange. This monthly publication will provide convenient summaries of recent developments at BOX.
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SIX Swiss Exchange: More choice for DEA clients
With Interactive Data’s 7ticks, SIX Swiss Exchange welcomes a new provider of direct electronic access (DEA) to its highly liquid marketplace.
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Hedge Funds & Managed Futures

HFT’s ‘Circus Market’ and a ‘Dash for Trash’ — Fund Manager Lets Loose
MoneyBeat – WSJ
In a letter to investors announcing his firm’s demise, Rinehart Capital Partners LLC founder Andrew Cunagin didn’t mince words. He lambasted “a circus market rigged” by high-frequency trading and a “dash for trash” among traders. Here’s an excerpt from the letter.
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Ex-Goldman Bankers Scrap Emerging Markets Mega-Fund
Alec Macfarlane – MoneyBeat – WSJ
DMC Partners, the emerging markets-focused private equity firm co-founded by a clutch of high-profile bankers – including a trio of senior executives from Goldman Sachs Group Inc.GS +0.27% – has abandoned plans to raise its first fund.
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Fund admin survey finds differences in offerings
Luke Clancy – Risk.net
Custody Risk’s Alternative Fund Administration Survey found noticeable differences in the service offerings of providers to hedge funds, funds of alternative funds, private equity and real estate funds.
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Banks & Brokers

No more secrets
Joshua Franklin – Reuters
Switzerland’s allure as a place to stash cash has been badly damaged by a U.S.-led campaign against tax cheats, and the country’s roughly 140 private banks can no longer rely on a reputation for secrecy to attract wealthy customers.
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ConvergEx Enhances Open-Close Algorithms
James Rundle – WatersTechnology
New York-headquartered brokerage ConvergEx has upgraded its opening and closing auction algorithms for the NYSE, NYSE Arca and Nasdaq exchanges.
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Clearing & Settlement

CCPs to get multiple recovery planning tools
Cecile Sourbes – Risk.net
International regulators will lay out a range of tools to help central counterparties (CCPs) plan for their recovery should they run into trouble instead of specifying one approach, according to Benoît Coeuré, executive board member at the European Central Bank (ECB).
jlne.ws/1rPF6Ex

LSE swap futures gain momentum
Tim Cave – Financial News
A senior consultant to a London Stock Exchange-led initiative to launch a new European swap future in alliance with a group of banks has left the project, according to two people familiar with the situation.
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CME Group – Clearing: Modification of the Variable Tick Range on E-mini NASDAQ 100 & NASDAQ 100 futures
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Indexes & Products

Interest-rate Volatility and VXTYN Futures – Presentations on Friday at RMC
Matt Moran – www.cboeoptionshub.com
In recent years we at CBOE have heard many inquiries on the subjects of managing interest rate risk and interest rate volatility. CBOE Holdings offers successful futures and options on the popular CBOE Volatility Index (VIX ) that reflects expected stock market volatility; we have been asked if futures and options on an interest-rate volatility index also could be launched.
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F-Squared Says Regulators Are Considering Civil Action
Christopher Condon and Sabrina Willmer – Bloomberg
F-Squared Investments Inc., one of the largest managers of investment products built using exchange-traded funds, said U.S. regulators were considering a civil action against the firm over performance claims made in the firm’s advertising materials.
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[TSE] ETF/ETN Monthly Report for Aug 2014
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Moscow Exchange Indices Monthly Review: August 2014
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The Spanish Stock Exchange Admits A New ETF Linked To The IBEX 35 Net Return To Trading – The ETF Is The New 1D-Class Shares Of The DB X-TRACKERS IBEX 35 UCITS ETF (DR)
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Technology

Why Data Centers Matter For High-Frequency Traders
Bill Fenick, Strategy and Marketing Director (Financial Services), Interxion – Wall Street & Technology
With HFT and electronic trading on the rise, firms are asking whether their legacy IT infrastructure is sufficient to support a higher volume of these transactions.
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Half of Financial Services Companies Plan to Adopt SDN
Andrew Bach – Wall Street & Technology
Juniper survey finds 56% of finance respondents plan to adopt software-defined networking within a year.
jlne.ws/1rPGirm

Enforcement

Martoma Loses Bid to Throw Out Insider-Trading Conviction
Bob Van Voris – Bloomberg
Former SAC Capital Advisors LP portfolio manager Mathew Martoma, found guilty of orchestrating a $275 million insider-trading scheme, lost a bid to throw out the conviction days before he’s set to be sentenced.
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Rogue Trader Jérôme Kerviel to Be Released From French Jail
NICOLA CLARK – Dealbook – NY Times
A French appeals court has accepted a request from Jérôme Kerviel, a former trader convicted of rogue dealings at Société Générale, that he be released from jail and allowed to serve out his three-year sentence with an electronic monitoring bracelet, his lawyer confirmed on Thursday.
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FCA fines RBS and NatWest for failures in mortgage advice process
The Financial Conduct Authority (FCA) has today fined The Royal Bank of Scotland and NatWest GBP14,474,600 for serious failings in their advised mortgage sales business.
jlne.ws/1rPGgQk

Deutsche Bank fined GBP4.7m for failing to properly report transactions
Deutsche Bank AG London Branch (Deutsche) has been fined GBP4,718,800 by the Financial Conduct Authority (FCA) for incorrectly reporting transactions between November 2007 and April 2013.
jlne.ws/1rPGg2T

FCA bans and fines former Burlington director for dishonest involvement in the sale of Unregulated Collective Investment Schemes to retail customers
The Financial Conduct Authority (FCA) has fined Craig Cameron GBP350,000 and banned him from any involvement in FCA authorised firms, after it found that he lacked honesty and integrity in relation to the promotion of three unregulated collective investment schemes (UCIS) to retail investors.
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NFA Regulatory Actions
Michael A. Plaia d/b/a Comtrade Financial Company, Michael Angelo Plaia and Nikolas Robert Weber
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Wealth Creation Investments LLC, Fox Financial Group LLC and Marcy F. Javor
jlne.ws/1rPFkvj

Nextsource Trading Corporation and Stewart Reid Wilson
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Boost Capital Inc.
jlne.ws/1rPFl2f

Quantitative Trading Advisors and Hatim Abdel Hamid Youssef
jlne.ws/1rPFmDl

FXDirectDealer and Joseph Botkier
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Cambridge Strategy Asset Management, Ltd.
jlne.ws/1rPFlPN

Environmental & Energy

Yale Asks Managers to Weigh Climate Change Risks
Dawn Lim – MoneyBeat – WSJ
Yale University is asking managers for its roughly $21 billion endowment to account for how climate change and potential regulations on fossil fuels could affect investments, the latest sign that university endowments are increasingly aware of the headline risks associated with coal, oil and gas investments.
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Asia-Pacific

Shenzhen exchange names new chairman
Simon Osborne – The Trade
China’s State Council has appointed Wu Lijun as the new chairman of the Shenzhen Stock Exchange (SZSE).
jlne.ws/1rPEUoD

Hong Kong-Shanghai Stock Market Link May Squeeze Local Brokers
Jill Mao – Bloomberg
Hong Kong’s small stock brokerages may shrink as a market access link with Shanghai increases costs and intensifies competition with Chinese firms, according to securities groups.
jlne.ws/Wm9pnF

Hong Kong volumes motor ahead as market cap hits record
Simon Osborne – The Trade
At the end of August, market capitalisation in Hong Kong reached an all-time high of HK$26,126 billion.
jlne.ws/1vWiJOl

HKEx: Initial 3-Day Check Of Application Proofs Will Be Discontinued After 30 September 2014
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Dalian Commodity Exchange, Bank of China Hold Seminar On Financial Service For Coal-Coke-Steel Industry Chain
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Frontier Markets

Argentina swap plan gets cold reception in New York
Davide Scigliuzzo – Reuters
Argentina’s plan to emerge from its second default in 13 years by swapping defaulted debt for new local-law bonds is receiving a cold reception in New York, where officials from the country’s finance ministry are meeting with investors.
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Turkey’s Banking Watchdog Places Islamic Bank Asya Under Watch
Kerim Karakaya, Yeliz Candemir and Emre Peker – WSJ
Turkey’s banking watchdog placed Asya Katilim Bankasi AS under watch and armed regulators with broad powers over the beleaguered Islamic lender. The move brings the bank one step closer to state seizure, as capital outflows and a ratings downgrade exacerbate damages from a political fight embroiling the lender, which has fallen from the largest of Turkey’s four Islamic banks in December to third in terms of assets.
jlne.ws/Wm4TWc

Company Backed by Robert Diamond Increases Stake in Nigerian Bank
CHAD BRAY – Dealbook – NY Times
The investment company Atlas Mara Co-Nvest, backed by Robert E. Diamond Jr., the former Barclays chief executive, said on Friday that it had increased its stake in Union Bank of Nigeria in its latest bet on the African financial sector.
jlne.ws/1rPGerL

Goldman Sachs to issue its first Islamic bond
Simeon Kerr in Dubai and Tom Braithwaite in New York – Financial Times
Goldman Sachs is reviving its plan to tap the growing market for Islamic bonds, by aiming to become the second global financial institution to issue a sukuk.
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Malawi Stock Exchange Weekly Trading Report – 05 September, 2014
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MCX Weekly Market Report August 28, 2014 – September 04, 2014
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Palestine Securities Exchange Monthly Investor Newsletter – August 2014
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