John Lothian Newsletter: Bunge says China lenders distorting soyabean trade; U.S. Treasurys Carry Weight of the World; Lost Comment Letter Triggers (Another) SEC Dissent

Feb 13, 2015

First Read

FINRA Board Approves $50 Million Contribution to the FINRA Foundation
FINRA
Contribution to Provide Ongoing Support for Research and Education Aimed at Improving the Financial Capability of Individuals and Families Nationwide
The Board of Governors of the Financial Industry Regulatory Authority (FINRA) approved a $50,000,000 contribution to the FINRA Investor Education Foundation to provide continuing support for the Foundation’s innovative research and education efforts.
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***** What would you do to promote financial literacy with $50 million?

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Harvey Goldschmid, Ex-SEC Commissioner, Scholar, Dies at 74
by Robert Schmidt, Bloomberg
Harvey Goldschmid, a former U.S. Securities and Exchange Commission member who helped lead the agency as it responded to a flood of corporate accounting scandals, has died. He was 74.
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***** Our condolences to his family, friends and colleagues.

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Blair Hull – Getting the Edge: Blackjack and the S&P 500
JohnLothianNews.com

“What you need to be is persistent and disciplined in your strategy.”

Blair Hull, founder and managing partner at Ketchum Trading, compares the similarities of playing Blackjack with trading the S&P 500. Hull is not only an experienced Blackjack player, but also has about 40 years of experience in the financial industry. He says that both Blackjack and trading can be approached using a similar strategy. Hull continues his explanation with diagrams and numbers to be aware of during the Blackjack and trading process and even correlates the deck of cards with amounts of dollars made per trade.
Watch the video »
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SEC officials blast agency over clerical error on swaps rulemaking
By Sarah N. Lynch, Reuters
U.S. securities regulators failed to consider a comment letter from a key derivatives trade group before adopting new swaps data reporting rules last month, prompting criticism on Wednesday from the agency’s two top Republicans.
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**JK: How many times will the SEC get away with the old “Our dog ate your comment letter” bit?

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MOVES- Traiana CEO departs, Solinger returns
By Mike Kentz, Reuters
Andrew Coyne, chief executive officer of pre- and post-trade processing firm Traiana, has left the organisation to pursue other opportunities, according to a source close to the firm. Traiana is owned by ICAP, the world’s largest inter-dealer broker of over-the-counter derivatives.
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**JK: The phrase “I don’t know if I’m coming or going” is popular at Traiana these days.

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The Day the Shouting Stopped; The energy, the surging life force of the trading pits has given way to the silent precision of electronic trading.
By Leo Melamed, WSJ
An era came to an end last week when the directors of the CME Group voted to close most of its futures trading pits in Chicago and New York. Futures markets have revolutionized global markets and initiated the modern era of finance. But “open outcry”—where traders and brokers gather on a trading floor and compete for transactions through hand signals and loud shouts of the quantity and price at which they are willing to buy or sell—had to give way to the silent precision of electronic trading. While the decision was inevitable, I still mourn.
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***** For the record, Chicago exchange members never stop shouting.

**Also see John’s column Making A Call Around the Pits

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The High Price of Cheating (Financially) on Your Spouse
MICHELLE PERRY HIGGINS, WSJ
It’s almost Valentine’s Day. What could possibly ruin a perfect holiday, you ask? If you are one of the 7.2 million Americans with a hidden bank or credit-card account and your spouse finds out, this could definitely kick cupid to the curb.
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***** The less they know, the more you can get in trouble. Make that, get in more trouble. I never get out of trouble.

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Web pioneer Vint Cerf warns of internet history ‘black hole’
Clive Cookson, San Jose, California, FT
Future historians will see the early 21st century as “an information black hole” unless “digital vellum” is introduced to preserve the content of the internet for millennia to come, internet pioneer Vint Cerf has warned.
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***** I have a hard time getting my head around black holes in space, let alone the Internet.

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Bubble Talk: Jose Scheinkman and the CME Group-MSRI Innovation Award Seminar
JohnLothianNews.com

On Monday morning, February 9, 2015, the CME Group-MSRI Prize in Innovative Quantitative Applications was awarded to Jose Scheinkman, economics professor at Columbia and Princeton Universities and one of the world’s leading experts on financial modeling. Since much of his recent work is centered on friction in the financial markets, Monday’s award ceremony was preceded by a seminar titled “Bubbles in the Markets: Why Do They Form, When Do They Burst?” At the conclusion of the ceremony, Prof. Scheinkman sat down with John Lothian News editor-at-large Doug Ashburn to discuss his most recent work.
Read the article and interview with Prof. Scheinkman »
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CBOE RMC, March 4-6 2015, Carlsbad California
Now in its 31st year in the U.S., the annual CBOE Risk Management Conference (RMC) is the premiere financial industry conference designed for institutional users of equity derivatives and volatility products. Hosted by the Chicago Board Options Exchange (CBOE), RMC is an educational forum dedicated to exploring the latest products, trading strategies and tactics used to manage risk exposure and enhance yields. RMC brings together top traders, strategists and researchers, enabling participants to learn the state-of-the-art in investment risk management from true experts in the field.
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MarketsWiki

MarketsWiki Page of the Day
Cinnober Financial Technology

MarketsWiki Recent Updates

People

Per-Anders Häll-Bedman; Brian Sack; Adolph Gerstenberg; David R. Ganis; Emma Davey; Christopher Fix; Chris Walsh; Carlton Jones; Andrei Marcu

Companies, Organizations and Groups

Cinnober Financial Technology; Australian Securities Exchange; Asia Securities Industry and Financial Markets Association; Boston Options Exchange Price Improvement Period; American International Group Inc.; Cicada Corp

Statistics

58,541,462 pages viewed, 8,152 articles, 189,566 edits
MarketsWiki Statistics

Lead Stories

Bunge says China lenders distorting soyabean trade
Gregory Meyer in New York, FT
The emergence of “financial players” from China has distorted the soyabean trade in the world’s biggest importer of the oilseed, helping depress results at trading house Bunge, the company said.
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Banks’ Ability to Delay Currency Trades May Not Be Fair
by Greg Farrell, Bloomberg
New York banking regulator Benjamin Lawsky said his agency’s probe of electronic currency trading focuses in part on a practice known as “last look,” a programming feature designed to let banks delay execution of orders to avoid getting burned on price swings.
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U.S. Treasurys Carry Weight of the World; Yields Ride a Roller Coaster, and There Could Be More Dips Ahead
By Richard Barley, WSJ
Bond markets are the heavyweight bruisers of the financial world: big, powerful and packing a hefty economic punch. But they are also surprisingly nimble and throw unexpected jabs.
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Lost Comment Letter Triggers (Another) SEC Dissent
By Andrew Ackerman, WSJ
Shortly after the Securities and Exchange Commission voted on January 14 to finalize a batch of postcrisis rules for the multitrillion-dollar swaps market, SEC staffers realized they forgot something: they had lost a comment letter filed by a key industry group.
The 20-page letter was one of several filed by the International Swaps and Derivatives Association. It outlined a range of technical points about the rules, which would establish data hubs to collect and store information on swaps trades for the portion of the market overseen by the SEC. Unfortunately, the SEC misplaced it because of a clerical error.
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Hedge fund ‘godfather’ reluctantly drawn into dogfight
Miles Johnson, FT
As he sat down to a curry lunch near the House of Commons on Wednesday, Stanley Fink, the Conservative peer, was digesting some unpalatable news.
The former Conservative party treasurer and multimillionaire, dubbed the “godfather” of the British hedge fund industry for his time as boss of Man Group, had minutes earlier been mentioned by Labour leader Ed Miliband in a speech that criticised “dodgy donors” who held accounts at HSBC’s Swiss private bank.
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Two J. P. Morgan Executives Connected to Asia Hiring Probe Pushed Out; Senior Investment Banking Executives to Leave J.P. Morgan in Coming Weeks
By Emily Glazer, Michael Rothfeld and Christopher M. Matthews – WSJ
J.P. Morgan Chase & Co. pushed out two senior executives connected to an investigation into its hiring in Asia, making them the latest to leave the firm amid the burgeoning probe, according to people familiar with the bank’s actions.
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Investors must keep on second guessing the Fed
Henny Sender, FT
The easy money offered by central banks is not without dangers, writes Henny Sender
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U.S. SEC’s Piwowar says skeptical of FINRA’s data collection proposal
By Sarah N. Lynch, Reuters
A top U.S. Securities and Exchange Commission official expressed skepticism on Thursday about a plan by Wall Street’s self-regulatory group to launch a trading data collection program, saying it may raise privacy concerns.
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Tales from the pit: 100 for YOU!
By Daniel P. Collins, Futures Magazine
With the CME Group’s recent announcement regarding closing most of its futures pits we thought it would be interesting to tell a few historic, and simply fun, stories of the trading floor. I get it started with this story from an “unenjoyment” day a couple of decades ago.
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Bank capital rules hitting markets, says BoE official
Caroline Binham, Financial Regulation Correspondent, FT
A Bank of England official has acknowledged that new rules since the financial crisis have made it harder to trade certain assets.
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Bankers Who Can Clean Up Mess Sought by Resolution Board
by Nicholas Comfort, Bloomberg
Elke Koenig, who starts next month as head of Europe’s Single Resolution Board, wants to hire bankers who know how to clean up a mess.
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BGC optimistic on GFI deal
By James Rundle, Financial News
The chief executive of interdealer broker BGC Partners has said that he believes its hostile bid for rival GFI Partners is set to succeed, ahead of a February 19 deadline.
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Regulatory

Statement of Marcia E. Asquith, Senior Vice President and Corporate Secretary, on the Loss of Harvey J. Goldschmid
FINRA
FINRA mourns the loss of former FINRA Governor Harvey J. Goldschmid. Goldschmid was a stalwart defender of the investing public and contributed immeasurably to FINRA’s mission of protecting investors and ensuring market integrity. Goldschmid was in FINRA’s inaugural class of governors following the formation of FINRA in 2007, and served on FINRA’s Board until 2014. He leaves an extraordinary legacy of dedication and service, which has held American investors in good stead. FINRA extends its deepest condolences to his wife Mary and their children.
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SEC and FINRA Publish Materials Addressing Cybersecurity
The National Law Review
U.S. financial markets and participants, much like other segments of the U.S. economy, are prime targets for technological hacks, intrusions, and breaches that can occur in today’s tech-laden business environment. In the face of these threats, on February 3, the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) each released materials addressing cybersecurity. Although FINRA’s report targeted its broker-dealer members, and the SEC’s report targeted broker-dealers and investment advisers, the reports deliver a message that could apply broadly to all financial market participants. In particular, when stripping away the reports’ financial undercurrent, general concepts are left that could apply to any business or organization that uses or is affected by technology.
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BitPay, Circle Endorse Bitcoin Derivative Platform LedgerX for CFTC Approval
Byu Gola Yashu, NewBTC
At the end of last year, Commodity Future Trading Commission (CFTC) had launched a commenting period to understand the feasibility of a Bitcoin-based derivate exchange LedgerX. Upon the extension of this course last week, financial professionals can now submit their comments until February 20.
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CFTC’s Massad on Capitol Hill
By Jacqui Fatka, Feedstuffs
Commissioner Timothy Massad, chairman of the Commodity Futures Trading Commission, was on Capitol Hill both Wednesday and Thursday fielding questions from House Agriculture and Appropriations Committee members.
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CSA proposes mandatory central clearing of OTC derivatives
Advisor.ca
Members of the Canadian Securities Administrators (CSA) have published for comment Proposed National Instrument 94-101 Mandatory Central Counterparty Clearing of Derivatives.
The proposed rule describes requirements for central counterparty clearing of over-the-counter (OTC) derivatives transactions, and is intended to improve transparency in the derivatives market while enhancing systemic risk mitigation.
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Self-Regulatory Organization (SRO) Rulemaking and National Market System (NMS) Plans
SEC

  • BATS: Notice of Filing of a Proposed Rule Change to Amend Rules 11.9, 11.12, and 11.13 of BATS Exchange, Inc. (Release No. 34-74247; File No. SR-BATS-2014-09; February 11, 2015); see also Exhibit 5

 

  • BYX: Notice of Filing of a Proposed Rule Change to Rules 11.9 of BATS Y-Exchange, Inc. (Release No. 34-74250; File No. SR-BYX-2015-07; February 11, 2015); see also Exhibit 5

 

  • C2: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Amend the Fees Schedule (Release No. 34-74252; File No. SR-C2-2015-002; February 11, 2015); see also Exhibit 5

 

  • CBOE: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Amend the Fees Schedule (Release No. 34-74253; File No. SR-CBOE-2015-014; February 11, 2015); see also Exhibit 5

 

  • EDGA: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Rules 1.5, 2.3, 2.5, and 2.6 Related to the Registration Requirements for Members of EDGA Exchange, Inc. (Release No. 34-74254; File No. SR-EDGA-2015-06; February 11, 2015); see also Exhibit 5

 

  • EDGX: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Rules 1.5, 2.3, 2.5, and 2.6 Related to the Registration Requirements for Members of EDGX Exchange, Inc. (Release No. 34-74255; File No. SR-EDGX-2015-06; February 11, 2015); see also Exhibit 5

 

  • FINRA: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Extend the Tier Size Pilot of FINRA Rule 6433 (Minimum Quotation Size Requirements for OTC Equity Securities) (Release No. 34-74251; File No. SR-FINRA-2015-002; February 11, 2015); see also Exhibit 5

 

  • ICC: Order Granting Approval of Proposed Rule Change to Revise ICC End-of-Day Price Discovery Policies and Procedures (Release No. 34-74257; File No. SR-ICC-2014-23; February 11, 2015)

 

  • ICC: Order Approving Proposed Rule Change to Provide for the Clearance of Additional Standard Western European Sovereign Single Names (Release No. 34-74256; File No. SR-ICC-2014-21; February 11, 2015)

 

  • NASDAQ: Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Clarify the Application of Fees to Securities under the Select Symbol Program of Rule 7018(a)(4) (Release No. 34-74259; File No. SR-NASDAQ-2015-010; February 11, 2015)

 

  • NASDAQ: Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Modify NASDAQ Rule 7018 Fees (Release No. 34-74258; File No. SR-NASDAQ-2015-008; February 11, 2015)

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SEC Announces Agenda, Panelists for Proxy Voting Roundtable
SEC
The Securities and Exchange Commission today announced the agenda and panelists for its February 19 roundtable on ways to improve the proxy voting process.
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Pamela C. Dyson Named SEC Chief Information Officer
SEC
The Securities and Exchange Commission today announced that Pamela C. Dyson has been appointed as the SEC’s Chief Information Officer (CIO) in charge of overseeing the agency’s information technology functions.
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ASIC enquires into risk management by responsible entities
ASIC
ASIC is making enquiries of a number of responsible entities of registered managed investment schemes regarding their risk management practices.
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CFTC’s Energy and Environmental Markets Advisory Committee to Meet on February 26, 2015
CFTC
The U.S. Commodity Futures Trading Commission (Commission) announced today that the Energy and Environmental Markets Advisory Committee (EEMAC) will hold a public meeting on February 26, 2015 from 10:00 am to 4:00 pm at the Commission’s Washington, D.C. headquarters at 1155 21st Street, NW, Washington, DC 20581.
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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
CFTC
The U.S. Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight (DMO) today announced the issuance of a no-action letter extending the conditional time-limited relief provided in CFTC No-Action Letter No. 13-76 for Australian-based trading platform Yieldbroker Pty Limited (Yieldbroker).
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ASIC issues stop order on pre-prospectus publications by Bitcoin Group Limited
ASIC
ASIC has placed a stop order prohibiting Bitcoin Group Limited (a proposed Bitcoin ‘miner’ in Australia) from publishing any statements concerning its intention to make an initial public offering of its shares until the lodgement of a prospectus.
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ASIC amends rules on trade reporting obligations for OTC derivatives following industry consultation
ASIC
ASIC has amended the ASIC Derivative Transaction Rules (Reporting) 2013 (derivative transaction rules (reporting)) following industry consultation and feedback on Consultation Paper 221 OTC Derivatives Reform: Proposed amendments to the ASIC Derivative Transaction Rules (Reporting) 2013 (CP 221).
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Exchanges & Trading Facilities

ICE’s Sprecher sees SuperDerivatives acquisition as serving key growth area
By Renee Caruthers, Fierce FinanceIT
Intercontinental Exchange Chairman and CEO Jeffrey Sprecher says he sees data consumption as a key growth area for the financial industry, and he expects his company’s acquisition of SuperDerivatives last year to help his company better serve that growth.
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Senior Director Security Architecture
CME Group Jobs
Description: The Security Architect will work closely with application architects, infrastructure architects, and security specialists to ensure security solutions are in place throughout all IT systems and platforms to mitigate identified risks sufficiently and to meet business objectives and regulatory requirements.
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MGEX Reports Pair Of Records From Wednesday
MondoVisione
MGEX, a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), reports top 20 daily records from both total volume and electronic volume following Wednesday’s activity. Total volume ended the day at 16,954, good enough for 17th-best on the all-time list, while electronic volume also ranked 17th, coming in at 14,171.
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Extended Trading Hours – Fees Schedule
CBOE
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CME Group Notices

  • Performance Bond Requirements: Coal, Electricity, ERIS, Interest Rates, Environmental, and Ethanol Outrights; Electricity Intra-Commodity Spread Charges; Natural Gas, Metals, Agriculture, Crude Oil, Equity Index and Electricity Inter-Commodity Spread Credits- Effective Friday, February 13, 2015 12 Feb 2015

 

  • Daily Submission of Large Trader, Ownership/Control Reports, and Open Interest Data

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BIS: Economic development in the euro area
Eurex
At the FT Debt Capital Markets Outlook Conference in London, Mr. Peter Praet, Member of the Executive Board of the European Central Bank, explained “the bank had to act because the inflation outlook had deteriorated, while our previous measures had not worked as effectively as we expected. That is why, faced with an increasing risk of a too prolonged period of low inflation, we increased our stimulus to a degree necessary to bring inflation closer to 2%.”
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Single Stock Dividend Futures: Corrected minimum price change for seven British Single Stock Dividend Futures
Eurex
The launch of seven new Single Stock Dividend Futures on dividends of British stocks was announced in Eurex circular 010/15, published on 21 January 2015. The minimum price change specified in the Section 1 of the circular was incorrect.
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Hedge Funds & Managed Futures

Raider Bramson Pursues U.K. Fund Managers One Campaign at a Time
by Jeremy KahnKiel Porter, Bloomberg
The crowd assembled beneath the ornate chandeliers in Saddlers’ Hall in London is expecting a showdown. Sherborne Investors, led by Edward Bramson, a publicity-shy New York activist who has targeted a succession of British money management firms in the past four years, has called this shareholder meeting to oust one member of the board of Electra Private Equity Plc and add Bramson and another candidate as directors.
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Commodity prices go back to basics
Emiko Terazono, FT
Commodity markets are going back to basics. Instead of moving up (or down) in lockstep with each other, and with other assets, they are beginning to show variatio
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Mutual fund investors are hosed: Jim Cramer
By Mitch Tuchman, MarketWatch
Mad Money host Jim Cramer, best known for offering stock tips on cable TV, is quickly becoming famous for taking what would seem for him a contrarian viewpoint — that investors should avoid stock-picking mutual funds like the plague
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Investors Snap Up Online Financial Advisers; Startups Get Lofty Valuations From Venture-Capital Backers, Who See Tech-Stock Appeal
By Telis Demos, WSJ
Silicon Valley’s latest passion: roboadvisers. Investors are pouring hundreds of millions of dollars into these young companies that provide automated online financial guidance.
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RIA in a Box Releases MyRIACompliance, an Online RIA Compliance Management Software Tool
MyRIACompliance
Today, at the 2015 Technology Tools for Today (T3) Advisor Conference, RIA in a Box (www.riainabox.com), a leading provider of regulatory compliance services and technology to registered investment adviser (RIA) firms, officially announced the release of MyRIACompliance, an online RIA compliance management and automation software tool.
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Banks & Brokers

Deutsche Bank Sued by Japan School on Derivative Losses
by Takahiko Hyuga, Bloomberg
Deutsche Bank AG’s Japan units were sued by a Japanese school operator for 9 billion yen ($76 million) in compensation for losses on derivative transactions.
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SocGen’s Russian Bank Unit Will Cut 1,500 Jobs This Year
by Fabio Benedetti-Valentini and Jason Corcoran, Bloomberg
Societe Generale SA plans to eliminate about 1,500 jobs in Russia this year as the country’s economic contraction squeezes profitability, according to a person with direct knowledge of the discussions.
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JPMorgan Asia investment bank vice-chairman Todd Marin steps down
Josh Noble in Hong Kong, FT
Todd Marin, vice-chairman of JPMorgan’s Asian investment bank, has become the latest senior executive to step down from the company, which is under investigation over its hiring practices in the region.
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Morgan Stanley puts spotlight on conduct risk in Europe
By Lucy McNulty and Sarah Krouse, Financial News
Morgan Stanley has formed a new conduct risk committee to influence culture across its Europe, Middle East and Africa operations, in what peers have described as an unusual move to address increased regulatory pressure to curb staff misbehaviour in the financial sector.
jlne.ws/17sJGQA

Goldman ex-programmer sues FBI agents, claims rights violations
By Nate Raymond, Reuters
A former Goldman Sachs Group Inc computer programmer on Thursday sued the FBI agents who investigated him in connection with allegations he stole secret code from the bank’s computers, contending they violated his constitutional rights.
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UBS avoids liability for couple’s soured sawmill investment
By Suzanne Barlyn, Reuters
UBS AG has avoided liability for a former broker’s alleged move to steer a Seattle-based couple to buy into a now-defuct sawmill after an arbitration panel found that the clients and their broker hid the investment from the bank.
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Clearing & Settlement

New Rules on Bank Capital, Swaps Clearing Set to Clash
WSJ
A new rule requiring banks to hold extra capital against all the assets on their books may have the unintended effect of undermining a central plank of the 2010 Dodd-Frank law aimed at boosting the safety of the multitrillion-dollar swaps market, a top regulator warned Thursday.
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Canadian Securities Regulators Seek Comment on Derivatives Rule Relating to Mandatory Central Counterparty Clearing
Aurotrité des marchés financiers
Members of the Canadian Securities Administrators (CSA) today published for comment Proposed National Instrument 94-101 Mandatory Central Counterparty Clearing of Derivatives (the Clearing Rule).
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Citigroup to Boost FX-Trading Fees 25% for Some Customers
Bloomberg Business
Citigroup is raising prices for clearing and settling currency trades, according to four people with knowledge of the move, who asked not to be identified to preserve their relationship with the New York-based firm. For at least some clients, the price climbed by roughly 25 percent, one of the people said.
jlne.ws/1zAi95p

Citi raises clearing, settlement fees
Futures & Options World
Citigroup is raising its clearing and settlement fees for currency trades as it attempts to reduce the hit it took following the Swiss franc’s collapse last month. The bank has been assessing the business for some time, according to a source familiar with the matter, and the prime brokerage arm will now charge higher fees from clients for the service.
jlne.ws/1zAhQb0

Common clearing for commodities major challenges ahead
Business Standard News
Reforms in the commodities derivatives market regarding clearing activities are facing many challenges as they are being examined by the ministry of finance before they are implemented. The reforms were proposed by the market regulator, Forward Markets Commission.
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Indexes & Products

European Equities Strong Yet Defensive-Oriented Year-to-Date as Global Political Dramas Unfold: Russell Indexes
Market Wired
The Russell Developed Europe Index is up 8.4% year-to-date as of 9 February, despite notable global headline risk across Europe, Russia and the Ukraine. And, while the overall index performance has been strong year-to-date, defensive-oriented stocks have outperformed dynamic-oriented stocks within the Russell Developed Europe Index, indicating continued caution on the part of European investors. The Russell Developed Europe Defensive Index has outperformed the Russell Developed Europe Dynamic Index by 2.3% year-to-date as of 9 February.
jlne.ws/1Mj0jOH

A Lame Defense of Active Management
DailyFinance
An advertisement from Fidelity that appeared in the Jan. 26 issue of The New Yorker caught my attention. It stated: “Since its inception in 1989, the Fidelity Low-Priced Stock Fund (FLPSX), managed by Joel Tillinghast, has outperformed its Russell 2000 (^RUT) benchmark by 4.66 percent on an average annualized basis. What can other investors learn from the fund’s performance? That active management can be a powerful strategy over the long run.”
jlne.ws/1zAizsE

Smart Beta Funds: Are They Really Smarter Or Just Hype?
Bankrate.com
Smart beta funds are the new black. Just one question: What does “smart beta” mean? Trying to round up all the strategies that fall under the smart beta umbrella is a little bit like trying to herd cats. They’re all over the place, each with different notions on where to go and how to get there.
jlne.ws/1zAiBRl

Russell Investments’ Transition Management service receives “Industry Innovation Award,” expands team to meet increasing client demand
Web Wire
Global asset manager Russell Investments recently earned its fourth consecutive CIO Magazine Industry Innovation Award. Specifically, Russell was recognized in the asset servicing category for its continued commitment to, and success in, transition management (TM) in 2014
jlne.ws/1zAiEfM

MSCI rejig may result in up to $250 million inflows
The Economic Times
The tweaking of the MSCI quarterly index — a widely tracked emerging market equity index — on Wednesday night may result in net inflow of $180-250 million to Indian stocks from foreign funds.
jlne.ws/1zAiF3s

UAE’s weight in MSCI EM index increased marginally
GulfNews.com
Dubai: Morgan Stanley Capital International Inc (MSCI) increased its weight of UAE in the emerging market index marginally, Arqaam Capital said in a note.
jlne.ws/1zAiJQI

Rising Oil Lifts All (Commodity) Boats
MoneyBeat – WSJ
In the commodity markets, a rising price of oil lifts all boats. The 24 commodities in the S&P GSCI index aren’t directly correlated with oil prices, as each raw material moves on its own supply-and-demand dynamics. But new data from S&P Dow Jones Indices show that when U.S. oil prices are up, it’s hard for other commodities to be down – and vice versa.
jlne.ws/1Mj0UzT

Platts China Steel Sentiment Index Plunged in February
The outlook for China’s steel market for the next 30 days is down on the back of weaker expectations for new domestic and export orders ahead of the long Chinese New Year holiday, according to the latest Platts China Steel Sentiment Index (Platts CSSI), which reflects market participants’ expectations.
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MSCI says 49 companies are eligible for its global indexes
Reuters
Index provider MSCI Inc said on Wednesday it has determined that 49 foreign-listed companies traded outside their home countries will be eligible for inclusion in its Global Investable Market Indexes. The move would allow so-called “orphan companies” such as Chinese online retailer Alibaba (BABA.N) and China’s online search engine Baidu Inc (BIDU.O) to be eligible for potential inclusion in both MSCI Global Indexes and MSCI Country Indexes.
jlne.ws/1CYUoeA

Markit in talks over index units
By Sarah Krouse, Financial News
Markit chief executive Lance Uggla is bullish on acquisition prospects for his firm in 2015 after a relatively quiet last year, with a particular eye on index operations that large banks are looking to shed.
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Technology

FinTech Exchange 2015 – April 23, Chicago
Barchart, a leading provider of market data and information, announced FinTech Exchange 2015, a new event to highlight technology innovation in financial markets and trading. More than 20 financial technology providers will participate, presenting in rapid-fire rounds that focus on innovations in trading software, market data, exchange technology, analytics, cloud computing, high-speed networking and mobile. The FinTech Exchange 2015 will be held on Thursday, April 23 at 1 p.m. in the Feinberg Theatre at Venue SIX10 in Chicago.
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***** Bravo to Barchart for their leadership in putting this together. They have asked me to moderate a panel discussion at the end of the day. Also, JLN will be providing coverage of the event and videoing many of the presentations.

Techstars, Barclays bring bank-disrupting startups to Big Apple
David Cohen – New York Business Journal
What’s worked so far in London could well work in New York, at least when it comes to financial tech startups. That’s what marquee startup accelerator Techstars and British banking giant Barclays are betting.
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Fintech is a big buzzword in local banks, securities and card companies
Fintech, which is an abbreviation of financial technology, has been increasingly becoming a must keyword in the local banking industry as well as securities and card companies in line with the government’s efforts to nurture the new promising financial sector. The local banking industry is particularly attracted to internet-based banks where all the financial and banking services are provided online without offline branches. The financial ministry also announced its plan to establish an internet-only bank within this year by lifting related regulations on the sector.
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Enforcement

SEC Charges Mutual Fund Adviser in Connection With Improper Handling of Fund Assets
SEC
The Securities and Exchange Commission today charged an investment adviser to several alternative mutual funds for maintaining millions of dollars of the funds’ cash collateral at broker-dealer counterparties instead of the funds’ custodial bank. The violations were uncovered during an SEC examination of the firm and the funds it manages.
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Macquarie Equities Limited enforceable undertaking and next steps
ASIC
ASIC has confirmed the finalisation of the two-year enforceable undertaking (EU) entered into by Macquarie Equities Limited (MEL) on 29 January 2013 (13-010MR). The EU aimed to address ASIC’s concerns about systemic deficiencies in MEL’s compliance with financial services laws under its AFS licence, operating under the name Macquarie Private Wealth (MPW).
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Environmental & Energy

Report: Axing fossil fuel subsidies could cut global emissions 13 per cent
BusinessGreen
Phasing out the $543bn of consumer subsidies handed to fossil fuels each year could cut global greenhouse gas emissions by between six and 13 per cent by 2050, according to a major new report presented to delegates at the UN’s latest climate meeting in Geneva this week.
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Shell CEO Says Industry Needs To Be Less Aloof In Climate Change Conversation
By James Gerken – The Huffington Post
Royal Dutch Shell CEO Ben van Beurden believes it is time for his industry to take a more active role in the conversation about climate change and become “less aloof.”
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Fossil fuel lobby goes on the attack against divestment movement
By Damian Carrington – The Guardian
“First they ignore you, then they laugh at you, then they fight you,” said Mahatma Gandhi. The climate change campaign to divest from fossil fuels seems to be moving through those stages at express speed, with a sudden barrage of attacks from the coal and oil lobbies ahead of its global divestment day on Valentine’s day.
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Nepal prepares for UN forest carbon trading
thethirdpole.net
Nepal’s forests store more than 500 million tonnes of carbon, new government research has revealed. This is equivalent to about two thirds of India’s total emissions in 2011.
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Rice serves up double measure of biofuel and fodder
By Tim Radford – Climate News Network
Japanese scientists have found a potential answer to the biofuel dilemma that if you grow crops for energy, you sacrifice crops for food.
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Asia-Pacific

Chinese Shake Up Aluminum; Tax Quirks Prompt Smelters to Mask Metal for Export as Processed
By Biman Mukherji and Rhiannon Hoyle – WSJ
A surge in aluminum exports from China is altering market dynamics for one of the world’s most heavily traded commodities. Because of quirks in China’s tax system, the trend involves reshaping the metal itself.
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Announcement – In relation to the matter of Pyxis Group Limited (Stock Code: 516) Cancellation of listing
HKEx
The Stock Exchange of Hong Kong Limited (the “Exchange”) hereby announces that with effect from 9:00 am on 17 February 2015, the listing of the shares of Pyxis Group Limited (the “Company”) will be cancelled in accordance with the delisting procedures under Practice Note 17 to the Listing Rules (the “Delisting Procedures”).
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HKFE Announces Revised Margins for China Mobile Futures
HKEx
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ASEAN Exchanges meet with the honourable Prime Minister Najib in support of the integration of ASEAN capital market
SGX
The 22nd ASEAN Exchanges CEOs meeting was held in Kuala Lumpur on 11th and 12th February 2015.
The ASEAN Exchanges CEOs met with the Prime Minister of Malaysia, Najib Razak, for a dialogue on how to further harmonise and integrate ASEAN capital markets in order to better support the growth of all ASEAN economies. Malaysia took over the Chairmanship of ASEAN in January 2015 and the meeting showed the support for the ASEAN Economic Community agenda.
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Frontier Markets

Securities and Exchange Board of India Notices
SEBI
PR – Order in the matter of M/s. Shah Group Builders Limited
PR – Order in the matter of M/s. Sukhchain Hire Purchase Limited
PR – Order in the matter of M/s. Hooghly Agrotech Limited
PR – Order in the matter of M/s. Adamant Infrastructures Limited
PR – Order in the matter of Suvidha Land Developers India Limited
PR – Order in the matter of M/s. HBN Dairies & Allied Limited
PR – Order in the matter of Suvidha Farming and Allied Limited
Interim Order in the case of RBN Infrastructure India Ltd.
JM Fixed Maturity Fund Series XXVI
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Miscellaneous

The Progressive Who Didn’t Pass ‘Go’
By MARY PILON, NY Times
For generations, the story of Monopoly’s Depression-era origins delighted fans almost as much as the board game itself. The tale, repeated for decades and often tucked into the game’s box along with the Community Chest and Chance cards, was that an unemployed man named Charles Darrow dreamed up Monopoly in the 1930s. He sold it and became a millionaire, his inventiveness saving him — and Parker Brothers, the beloved New England board game maker — from the brink of destruction.
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David Carr, a Journalist at the Center of the Sweet Spot
By A. O. SCOTT, NY Times
For a while, a few years ago, there was a weekly video on the New York Times website called The Sweet Spot, taped during off hours in the cafeteria on the 14th floor. The idea was that it would be an informal, incisive discussion of various developments in the world of culture and media. Sometimes it managed to live up to its name, and sometimes it didn’t, but for me the show — or webcast, or schmooze fest, or whatever it was — had a much simpler reason for being: It guaranteed that I would have a few hours a week in the company of David Carr. For anyone who cared about journalism, there was simply no better place to be.
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CME to permanently close most trading pits

CME to permanently close most trading pits

First Read $40,626/$300,000 (13.5%) Anonymous ++++ Hits & Takes John Lothian & JLN Staff Without fanfare or amplification from its executives, the CME Group shut the books on most -- but not all -- of its floor trading history Tuesday afternoon with the...

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