First Read

Standardization to serve diversity
Nils-Robert Persson – Cinnober
Today it’s the FIX Nordic Trading Briefing in Stockholm, and we’re very happy about having a mere five-minute walk to a highly interesting industry event with an international audience. (Go standardization! It just makes life so much easier.)

Otherwise, being based in Stockholm and representing a very specialized technology company serving exchanges and clearinghouses all over the globe, there are quite a few travel days in all directions in a year. Not to complain; we really enjoy our multicultural client base, and we strive to mirror that in our employees. Cinnober currently has close to 30 different nationalities represented in the staff – and the number is still growing.

On this day 63 years ago, AT&T became the first American company to have a million shareholders. I wonder how many of them still hold their shares today, besides Mr. Buffett, of course.

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ISDA and FIA Europe Publish European Cleared Derivatives Execution Agreement
The International Swaps and Derivatives Association, Inc. (ISDA) and FIA Europe today jointly announced the publication of the ISDA/FIA Europe Cleared Derivatives Execution Agreement for principal-to-principal client clearing.
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***NRP: Are they trying to hide something by naming the doc like that? Seems like a really interesting area, but just some poor marketing of the same?

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‘Trade-at’ rule would hit US dark pool volumes
The Trade News
The introduction of a ‘trade-at’ rule could halve trading volumes in US dark pools, according to New York agency brokerage Rosenblatt Securities. Exchanges have been lobbying US regulator the Securities and Exchange Commission (SEC) to introduce a rule that would force equities transactions onto lit exchanges unless dark pools or internalising matching engines operated by brokers could prove meaningful price improvement had been achieved.
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***NRP: And the battle continues… exchanges vs dark pools.

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FIA Market Technology Event Wed. May 21, Chicago
Futures Industry Association
As markets have become faster and more automated, have the tools used for surveillance kept up with the pace of innovation? Have abusive or disruptive practices changed or have they just become more difficult to detect? Our panel of experts from exchanges and technology providers will discuss the challenges of surveillance, and how technology has adapted from floor trading to high speed electronic trading.
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***DA: This event, which is held in conjunction with the FIA Market Technology Division’s annual meeting, features several surveillance experts, including one from our friends at Cinnober.

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Challenges to Abenomics
Bluford Putnam and Samantha Azzarello – CME Group
A spotlight shines very brightly on Japan at the moment – and especially on Prime Minister Abe – not unexpected of course when an economic policy bears your name.
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***NRP: Japan is good at exporting great goods, and hopefully they are about to open up to importing exchange technology

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Intelligence Trumps Speed in the New Markets
Paul Rowady – TabbFORUM
The overarching need to constantly cut costs and maximize every trading opportunity is driving a new megatrend in capital markets: The focus on getting faster is becoming a mandate to get smarter.
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***NRP: It’s never good doing something unintelligent really fast

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‘Flash Boys’ Rankles Fewer Europeans in Trading Survey
Nandini Sukumar – Bloomberg
The “Flash Boys” effect is more muted in Europe. Michael Lewis’s book on high-frequency trading provoked an uproar on Wall Street about market fairness and resonated with more than two-thirds of U.S. financial-industry participants. In Europe, however, the skeptics are fewer and their disbelief in the system less intense, a ConvergEx Group LLC survey found.
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Perseus Wins Best Innovation 3 Years Running
High precision network provider honoured for London Metro Wireless (2014) Trans-Atlantic Connectivity (2013) and Brazil Trading Access (2012) at the Global Telecoms Business Innovation Awards.
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***DA: Atta boy, Jock

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IMA calls for transparency on trading frequency
Mike Foster – Financial News
The Investment Management Association is launching a consultation with its members on the potential publication of a standardised “portfolio turnover rate” – how active a manager is in buying and selling shares — for each of their funds.
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Nasdaq OMX Expands Information Offering with Macroeconomic Data
Ivy Schmerken – Wall Street & Technology
Nasdaq OMX has inked an exclusive agreement with MasterCard Advisors, a division of MasterCard, to distribute detailed data on consumer spending trends to the professional investment community.
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***NRP: This is really cool stuff. The thing that impresses me with Nasdaq is their work and ideas with adding value to and around the listed companies and the trading community with different kind of add ons. There are some other parts I’m not as impressed by, but hey… I’m of course totally biased here… 😉

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Why bond traders should watch World Cup
Ralph Atkins in London – FT.com
The football World Cup will provide a welcome distraction for financial markets if trading is listless when it kicks off in Brazil in just four weeks. At least the 32-nation competition will see real, fast-moving action. There is another good reason for watching: it could prove more insightful for bond dealers than imagined.
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***NRP: Definition of a slow day in the news – when FT writes about sports? Actually, neither me or Zlatan cares too much about the World Cup for obvious reasons. (Shouldn’t make fun of the article though – a really good one.)

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Data Dive: CFTC’s O’Malia says swaps analytics need work
JohnLothianNews.com
The CFTC is mandated to help police the futures arena and its much bigger relative, the swapsmarket. Collecting and monitoring data on the swaps market has been a vexing problem for the agency, but CFTC Commissioner Scott O’Malia said it will solve it.

“We have four different trade repositories, all of them accepting different data,” he said. “All of them have a different data architecture. So that means aggregating it is much difficult.”

Watch the video »

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MarketsWiki

MarketsWiki Page of the Day
Gina Talamona
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MarketsWiki Recent Updates

People

Judith Hardt; Gina Talamona; Christian Katz; Ellen Greene

Companies, Organizations and Groups

Commodity Futures Trading Commission; Bank of America Corp.; Patsystems Plc; JPMorgan Chase & Co.; Mark Graban Hadlock; Aquila; Nasdaq-Liffe Markets; IEX Group; Brookings Institution

Miscellaneous

Commodity Futures Trading Commission Act of 1974; Market manipulation; Dodd-Frank Wall Street Reform and Consumer Protection Act

Statistics

48,929,636 pages viewed, 7,951 articles, 182,879 edits
MarketsWiki Statistics

Lead Stories

BlackRock signals bond trading shake-up
Michael Mackenzie in New York – FT.com
BlackRock, the world’s largest asset manager, is teaming up with electronic trading hub Tradeweb in a shake-up for US bond and derivatives markets, supported by Wall Street banks.
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***NRP: Takes two to tango – but BlackRock is leading.

U.S. SEC to decide soon how to enact ‘tick size’ pilot program
Reuters
The Securities and Exchange Commission must decide soon whether to ask U.S. stock exchanges to enact a pilot program to try to boost trading in illiquid stocks or let the exchanges put forward a plan first, an SEC commissioner said on Wednesday.
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***NRP: Classic challenge – how to improve liquidity and trading in illiquid stocks. The times when one size fit all is long gone.

CFTC Charges RP Martin Holdings Limited and Its Subsidiary, Martin Brokers (UK) Limited, with Manipulation and Attempted Manipulation of Yen Libor
The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order against RP Martin Holdings Limited, and its subsidiary, Martin Brokers (UK) Limited (collectively, RP Martin), an interdealer broker, filing and settling charges of manipulation, attempted manipulation, false reporting, and aiding and abetting derivatives traders’ acts of manipulation and attempted manipulation of the London Interbank Offered Rate (LIBOR) for Yen, a leading interest rate benchmark used to price trillions of dollars of transactions.
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IEX Looks to Expand Beyond ‘Garden Variety’ Equity Trading
Sarah Krouse – MoneyBeat – WSJ
IEX Group, the alternative exchange group that drew worldwide attention thanks to Michael Lewis’s latest book, is looking to move beyond plain vanilla equity trading. IEX, which operates as a dark pool trading platform, is in “exploratory” talks with pension funds, ETF providers and asset allocation desks on market structure issues and ways to bring more trading onto the venue.
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***JM: Article from yesterday, now out from behind the paywall in case it stopped you…

Senators fret over high-frequency commodity trades
Laurel White – Medill News Service
Senators are fearful that high-frequency traders are getting an unfair advantage and endangering the stability of the U.S. futures market, the financial exchange for trades of commodities like corn and gold. But industry experts warn against rushing to impose new regulations.
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Bonus clawback rules ‘unenforceable’, say bankers
Martin Arnold, Banking Editor – FT.com
The Bank of England’s proposals to impose the world’s toughest rules for clawing back bonuses from bankers could be unenforceable in the UK and would be illegal in some countries, an industry lobby group has warned.
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No demand for EU MTFs to seek US approval, says GFI
Peter Madigan – Risk.net
There is “zero demand” for European trading platforms to apply for US regulatory approval under the terms of a transatlantic accord unveiled in February, according to executives at interdealer broker GFI Group. The comments are the latest to paint the accord as a flop.
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***NRP: No one wants to be regulated by the US if they don’t have to… European regulation is bad enough.

What’s The London Silver Fix, And Why’s It Going Away?
MoneyBeat – WSJ
London Silver Fixing Limited, the company that runs the silver benchmarking process known as the London silver fix, has said it will cease from August 14, ending a practice that goes back 117 years. So just what is this fix, and why is such a venerable City of London institution about to call it a day?
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Russia fund manager facing tough times, gets no help from Putin
Reuters
Voya Russia Fund manager Nathan Griffiths works from The Hague, but worries he could be trapped in Moscow.
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US Senate rule changes lead to empty chairs
Robin Harding and Gina Chon in Washington – FT.com
Radical changes to Senate rules have failed to speed up confirmations to vital economic jobs. The nominations of Stanley Fischer and Lael Brainard to the Fed have languished in the Senate for four months so far, even though a cloture motion was filed on Wednesday evening on Mr Fischer’s nomination, which could set up a vote next week.
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Regulatory

CFTC Reviewing U.S. Banks’ Overseas Trading for Possible Evasion
Bloomberg
The Commodity Futures Trading Commission is reviewing U.S. banks’ steps to restructure overseas swap trading as part of an examination of whether the companies might be evading Dodd-Frank Act rules.
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SEC Names Gina Talamona as Communications Director
The Securities and Exchange Commission today announced that Gina Talamona has been named communications director. Ms. Talamona, who will report to Chair Mary Jo White, will provide strategic advice on a variety of communications issues relating to the SEC’s mission to protect investors, facilitate capital formation, and maintain the integrity of the nation’s markets.
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Treasury denies asset management study ignored SEC feedback
Reuters
The U.S. Treasury Department is staunchly refuting claims by Republican lawmakers that a research report highlighting risks in the asset management industry failed to incorporate feedback from the sector’s primary regulator.
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Alert Highlights Big Changes for Audits of Broker-Dealers
AccountingWEB
A member alert issued on Monday by the Center for Audit Quality (CAQ) and the American Institute of CPAs (AICPA) outlines a handful of regulatory changes for audits and attestation engagements of brokers and dealers and futures commission merchants, including those that are dually registered, effective on June 1.
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CFTC’s Division of Market Oversight Extends Conditional Time-Limited No-Action Relief to Australian-Based Trading Platform Yieldbroker Pty Limited
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Testimony Of Mark P. Wetjen Acting Chairman, Commodity Futures Trading Commission Before The U.S. Senate Appropriations Subcommittee On Financial Services And General Government
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SIFMA Executive Vice President Randy Snook Remarks For SIFMA’s Market Structure Conference
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Exchanges & Trading Facilities

U.K. Court Grants LME Permission to Appeal Rusal Decision
WSJ.com
The London Metal Exchange said Thursday it has been granted permission to appeal a ruling that stopped planned reforms to its warehousing system. The U.K. Court of Appeal said the exchange could challenge the surprise victory by Russia’s United Co. Rusal, which in March succeeded in quashing changes the LME had proposed to address delays in accessing metals.
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EURONEXT ANNOUNCES SECOND PAN-EUROPEAN INVESTOR CONFERENCE AT THE NEW YORK STOCK EXCHANGE
Euronext, a wholly owned subsidiary of IntercontinentalExchange Group, today announced its second pan-European Investor conference in New York aimed at raising the profile of its European listed companies among US investors. The event, which will be attended by over 50 large issuers from across all the Euronext countries and over 200 US investors, will take place over three days from 19th to 21st May 2014.
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NASDAQ OMX Global Data Group Adopts Open Symbology
The NASDAQ OMX Group, Inc., a market leading provider of real-time and historical market data, announced today that the NASDAQ Last Sale Plus data feed has incorporated Bloomberg’s Open Symbology, a flexible and publicly available methodology for identifying financial securities across all global asset classes. Incorporating BSYM into its primary market data feed will help NASDAQ OMX clients streamline data integration within ticker plants and other internal systems, and overall enhance data integration processes across their organization.
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***NRP: I like standards; the best part is that there are so many to choose from.

GDF SUEZ opens trading on Euronext’s market with record-breaking Green Bond
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LSE passes £1bn milestone on LCH anniversary
Tim Cave – Financial News
The London Stock Exchange has posted full-year revenues of more than £1 billion for the first time in its 213-year history, with its chief executive hailing a “far more equitable” relationship with its clearing house subsidiary LCH Clearnet.
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***NRP: Xavier really earns some credit for his work with this old crown jewel during the last five years. I find it both great and somehow modern that a Frenchman is working so hard to preserve London’s premium spot in the global arena.

Energy Exchange Thrives Under ICE
Jonathan Watkins – FOW
Just before the landmark takeovers of NYSE Euronext and SMX, ICE acquired a majority stake in Dutch energy exchange Endex in September 2012. Now, nine months after switching the Endex business onto ICE Futures Europe, trading activity has more than tripled on the platform compared to the same period in 2013.
**NRP: Most people who know me know that I’m a great fan of ice & ICE – skating, skiing as well as the integration ability shown by Jeff and his management… really eager to see how they will handle LIFFE the coming years.

NYSE Says Problem With Data Feed Has Been Resolved
MarketWatch
The New York Stock Exchange said Wednesday afternoon that a problem with one of its data feeds has been resolved.
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***NRP: Remember the days when we used to compare the quality demands within our industry with the high demands and standards founded in the aerospace and nuclear industries? Our industry needs to get back to these days.

WSE Receives Achievement Award From EMEA Finance Magazine
The ceremony of Europe Banking Awards 2013 presented by the EMEA Finance magazine took place yesterday. EMEA Finance is a bimonthly magazine published in London. It is devoted to the banking and financial sector in Europe, Middle East and Africa (EMEA).
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CBOE, C2 and CFE Trading Schedule For the Memorial Day Holiday
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Numericable And Altice List Record High-Yield Bonds On Luxembourg Stock Exchange
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BNP Paribas Joins TOM MTF As New Member
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Hedge Funds & Managed Futures

O’Connor produces another hedge fund, Satori Investment Partners
Lynne Marek – Crain’s Chicago Business
The O’Connor asset management business of UBS AG in Chicago has been birthing hedge funds and trading firms for more than a decade, and it’s about to deliver another one.
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BlackRock joins with Tradeweb to bring more pricing in-house
Reuters
BlackRock Inc, the world’s largest money manager, said on Wednesday it has partnered with trading platform Tradeweb Markets LLC to bring pricing for fixed-income securities and derivatives in-house to BlackRock’s investment and risk management system.
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Why Hedge Funds Don’t Worry About Carried Interest Tax Rules
VICTOR FLEISCHER – NYTimes.com
Hedge fund managers don’t use the carried interest tax loophole. They need something more exotic. Hedge fund managers, after all, have a lot of income to shelter.
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What Hedge Funds Talk About When They Talk About Money
NYTimes.com
Behind the dancing fountains of the Bellagio Hotel, hedge fund titans mingled with wealth managers at the Hyde nightclub on Tuesday night.
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A Museum Tour With Blackstone’s Hill
NYTimes.com
J. Tomilson Hill, the vice chairman of the Blackstone Group, is known on Wall Street as a veteran deal maker. But he has recently been displaying his prowess in a different field: art.
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Banks & Brokers

Citigroup fires 11 in fraud probe of Banamex unit
Reuters
Citigroup Inc has fired four senior executives and seven other employees, saying they failed to do enough to protect the bank from loan fraud at its Mexican unit Banamex, according to an internal memo sent to staff on Wednesday.
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Head of Barclays Investment Banking in Asia to Step Down
NYTimes.com
The Asia head of investment banking at the British lender Barclays is stepping down as it prepares to radically reshape its business.
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SocGen sets Newedge EUR200m profit target
Philip Stafford – FT.com
Société Générale plans to reverse rapidly-declining profitability at Newedge, the futures broker it took full control of last week, in the next two years by moving into equity trading services and deepening cost cuts.
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Clearing & Settlement

Repositories call on Esma to help fix Emir reporting problems
Fiona Maxwell – Risk.net
The European Securities and Markets Authority needs to help fix the region’s still-new derivatives reporting regime, according to two of Europe’s six authorised trade repositories.
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Indexes & Products

ETF Manager F-Squared Investments Says Past Returns ‘Clearly Overstated’ In Marketing Materials
WSJ.com
F-Squared Investments Inc., a fast-growing manager of portfolios built around exchange-traded funds, said it had “clearly overstated” the past performance of its main strategy in marketing materials and misrepresented that its strategy tracked real money, according to a letter from F-Squared to clients.
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Hedge-Fund Heavy Bets on More Volatility Ahead
MoneyBeat – WSJ
John Bader, chairman and chief investment officer of Halcyon Asset Management LLC, said he sees the Chicago Board Options Exchange Volatility Index, known as the market’s fear gauge, moving higher in the weeks to come as geopolitical concerns spook traders.
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MSCI reclassifies stock indexes, adds Twitter to world index
Reuters
Equity index provider MSCI on Wednesday reclassified equities across a broad spectrum of markets as part of its semi-annual review, including the addition of Twitter to its all world index.
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Technology

Finextra: Interactive Data names Joachim Lauterbach president, managed solutions
Interactive Data Corporation, a leading provider of financial market data, analytics and related solutions, today announced that Joachim Lauterbach has been appointed as president and global head of its Managed Solutions business and Chairman of the Executive Board of Interactive Data Managed Solutions (IDMS) AG.
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CdR Capital Selects Advent’s Wealth Management Solution
Advent Software, Inc., a leading provider of software and services for the global investment management industry, today announced that CdR Capital, a private investment office based in Geneva, Switzerland, has selected Advent’s award winning wealth management solution, Advent Portfolio Exchange, for portfolio management and client relationship management.
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HFN Wireless Network Halves Latency Between NJ2, NY4 Datacenters
Faye Kilburn – WatersTechnology
Paramus, NJ-based network provider Hudson Fiber Network (HFN) has gone live with a new radio frequency (RF) wireless route between two key datacenter locations in New Jersey operated by datacenter and hosting provider Equinix, halving the latency of HFN’s previous fiber-only routes between the facilities.
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Thomson Reuters To Present At The Sanford C. Bernstein Thirtieth Annual Strategic Decisions Conference
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Enforcement

Two years for Pierre Veillet
On March 27, 2014, Justice of the Peace Patricia Compagnone of the Court of Québec, district of Longueuil, ordered Pierre Veillet to serve a two-year prison term and pay fines totalling $1,296,800, which is double the minimum penalty prescribed under the Securities Act, for pursuing illegal activities as a dealer and aiding with an illegal distribution of securities.
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Mayor of Kentucky town settles civil charges of insider trading
Reuters
A lawyer previously employed at a corporate law firm who now serves as mayor of Fort Mitchell, Kentucky, has agreed to pay nearly $118,000 to resolve civil charges of insider trading by the U.S. Securities and Exchange Commission.
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Environmental & Energy

Russia, wary of sanctions, wants exporters to be paid in roubles
Gleb Stolyarov, Reuters
Russia, keen to dodge threatened Western sanctions against its companies over the Ukraine crisis, said on Wednesday it was looking at ways to make its major state-owned exporters such as energy giants receive payment in roubles.
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Russian Slowdown to Shield Europe From Ukraine Gas Cuts
Isis Almeida, Bloomberg
European natural gas traders are betting Russia’s economy can’t afford to lose more than $100 billion if the crisis in Ukraine escalates, reducing the odds of a long-lasting supply cut to the former Soviet nation.
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***LB: Also in this story “Gas futures in the U.K., Europe’s biggest market, declined 19 percent since Russia invaded Crimea in February and tumbled last week to the lowest since 2010.”

Gazprom’s 24% Rally at Risk on Ukraine Gas Prepayment Demand
Halia Pavliva, Bloomberg
OAO Gazprom’s 24 percent rally from this year’s low in March will probably end soon as the crisis in Ukraine threatens to disrupt the Russian gas producer’s exports, according to Sberbank Asset Management.
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Asia-Pacific

Loosening Of China Outbound Rules Still Raises Questions
Ned Levin and Prudence Ho – MoneyBeat – WSJ
Yuan band widening! Free trade zones! State-owned enterprise listings! While headlines point to a season of economic liberalization in China, every innovation seems to carry its share of caveats and unanswered questions.
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US investors set for China listings feast
Josh Noble in Hong Kong and Nicole Bullock in New York – FT.com
When you have lost your appetite, the last thing you need is a feast. But US investors will now have to decide whether to nibble on the upcoming Chinese tech flotations or wait for the bumper main course – Alibaba.
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JCCH SPAN Parameter update effective 5/16/14
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Thai Bourse Market Report For April
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China Plastics Industry Conference 2014 To Kick Off In Hangzhou
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Shanghai Stock Exchange: “9 New Opinions” Gives Historic Opportunity
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Hong Kong’s Securities And Futures Commission Resolves Concerns Over Citigroup’s Algorithmic Trading System
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Frontier Markets

Stop the scramble: Africa rewards patient investors
John Authers – FT.com
The scramble for Africa is on once more. Stock markets in sub-Saharan Africa have lead the world over the past five years, while surveys show that private equity managers are now more bullish about the region than they are about China, India or Brazil.
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Miscellaneous

The Boring (for Now) Market
MoneyBeat – WSJ
Boredom is anathema to a reporter, to be perfectly honest. We want action, and intrigue, and readers on the edge of their seats, wondering what’s going to happen next. That’s what sells papers, as they used to say. But we’ve got to just face the fact that right now, the market is simply boring.
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Accounting for Earnings Manipulation
Justin Lahart – MoneyBeat – WSJ
Don’t think companies that lard chief executives pay packages with equity incentives are at risk of earnings manipulation? Accounting firms aren’t taking any chances.
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