Futures traders shun mandatory guards against ‘wash trades’
Mandatory safeguards to prevent automated traders from illegally acting as buyer and seller in the same transactions would be harmful to the trading industry by exposing firms to unnecessary risk, a futures-industry group said on Wednesday
***** If the CFTC thinks it is a good idea to try and control wash trades at the firm level, they do not understand the structure of our market.
FIA Responds To CFTC Concept Release On Risk Controls And System Safeguards For Automated Trading Environments
The response describes the many risk controls and system safeguards that are currently in use in the futures industry, and outlines several principles for the CFTC to consider as it examines ways to further strengthen those controls and safeguards.
Niba Reports on Meeting With CME Group
Dan Collins Report
It took a little bit of time for market participants to respond to the new exchange and data fees that CME Group first announced on Nov. 12 this year. While the exchange fee increase was pretty standard; on further review, the increase in data fees has the potential to significantly add cost to industry participants. This was first brought to light by a letter to industry participants by industry legend Les Rosenthal.
***DA: Spoiler alert – they don’t much care for the fee increase.
CME still studying launch of U.S. Gulf Coast futures contracts
CME Group is stepping back from the launch of two new crude oil futures contracts to further assess U.S. oil production and infrastructure growth and how it boosts liquidity in Gulf Coast spot markets, executives said on Wednesday.
**JK: I volunteer to go down to the Gulf and research this topic until April. Current temperature in Chicago is -1 degree.
World Federation of Exchanges (WFE) Launches Global Cyber Security Committee
The World Federation of Exchanges (WFE) announced today the launch of the exchange industry’s first cyber security committee with a mission to aid in the protection of the global capital markets.
CBOE Claims Three Top Awards From Futures And Options World
The Chicago Board Options Exchange today was named “U.S. Options Exchange of the Year” for the second consecutive year at an awards ceremony during Futures and Options World magazine’s Derivatives World London Conference. CBOE also claimed top honors for “Most Innovative New Contract, Index and Equities” for its S&P 500 Variance futures product, and “Best Technology Innovation by an Exchange, The Americas” for its new London Trading Hub.
***DA: John Lothian took the award for best bilateral knee replacement.
Trading Technologies’ MultiBroker Wins “Best New Technology Product – Trading and Execution” at 2013 FOW International Awards
Trading Technologies International, Inc. was awarded “Best New Technology Product – Trading and Execution” for its MultiBroker ASP solution at the 2013 FOW International Awards last night in London.
***JM: Doug Ashburn recently earned a personal best in keeping quiet during a staff meeting at 1 hour and 57 minutes of talk time.
Fidessa Wins FOW Award For Best Sell-Side Trading System – Platform Continues To Receive Accreditation From Across The Industry
Fidessa group plc today announced that its derivatives trading platform has been selected as Sell-Side Trading System of the Year at the 2013 FOW International Awards. The win marks continued success for Fidessa’s platform, after receiving the same accolade at FOW’s Awards for Asia in Singapore earlier this year, and collecting the FCMs’ Independent Software Vendor of the Year prize at FOW’s International Awards in London in 2012.
***** Jon Matte took the “Cat Video Distribution” award, Norway division.
***** More changes at OCC as Wayne Luthringshausen retires and Craig Donohue takes over as executive chairman.
Green Key Technologies Awarded OTC Matching Algorithm Patent
Green Key Technologies, a financial markets technology solutions provider, announced today that the United States Patent Office has awarded the company a patent for the design of their OTC liquidity allocation process called “Decline Ratio Matching”.
***DA: I thought eHarmony.com already held that patent.
The Effectiveness of Standard Deviation at Forecasting Risk
Covenant Capital Management
Understanding risk in the field of finance and investments is of paramount importance. To this end, financial practitioners and academics have developed statistical approaches to model risk based on an asset’s past price action. Foremost among them is the use of standard deviation as a proxy for an investment’s risk.
Occupy the SEC’s Volcker Rule Role
Stephanie Armour – MoneyBeat – WSJ
The final Volcker rule was shaped in part by an array of comments that came from members of Congress, foreign banking entities, and trade associations. It was also shaped in no small part by Occupy the SEC, a lesser-known group that grew out of Occupy Wall Street, a movement against social and economic inequality that led to arrests, camp outs in New York’s Zuccotti Park, and the slogan “We are the 99 percent.”
***** NOW we know what they really wanted.
Chuck Schwab: Pioneer, Innovator, Procrastinator
Ben Steverman – Bloomberg
When Charles R. Schwab started his own firm in the 1970s, he and other discount brokers opened up the markets to regular folks, giving them the chance to make colossal investing mistakes just like Wall Street’s fancier clientele.
***** How much stock could a stock trader trade if a stock trader could talk to Chuck?
Extreme Makeover: Gary DeWaal Says FCM Landscape has to Change
The futures commission merchant (FCM) space is likely to change dramatically in the coming years. How is the question. John Lothian News sat down with Gary DeWaal, of Gary Dewaal Associates, for his views on the shape of the brokerage industry in the coming years. “For years FCMs have tried to be everything to everybody,” DeWaal says. “Frankly, except for two or three of the big FCMs, that is not a reasonable prospect going forward. I think that FCMs are going to really have to figure out what its niche is.”
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Cash-strapped regulators face heavy Volcker workload
Gina Chon in Washington – FT.com
US regulators who approved the Volcker rule face a heavier workload to uphold it, but it is unclear if the cash-strapped agencies have the resources to deal with another regulatory task.
ICE completes new NYSE Liffe board
Anna Irrera – Financial News
IntercontinentalExchange has finalised a new board of directors for NYSE Liffe, the European financial futures business it acquired in November through the takeover of NYSE Euronext.
European financial transactions tax suffers backlash
Philip Stafford in London and Alex Barker in Brussels – FT.com
The EU is to debate the first drafts to a reshaped European financial transactions tax that would potentially exclude trading of sovereign and public debt but further clamp down on high-frequency trading.
EU Agrees Rules for Winding Up Failing Banks
The European Union agreed late Wednesday on a new rule book for winding up failing banks that will require creditors to shoulder more of the burden and reduce the cost of taxpayer-funded bailouts.
Libor Traders Said to Face U.K. Fines as Soon as Next Month
Suzi Ring – Bloomberg
U.K. regulators may issue the first penalties against individuals in their probe of Libor manipulation as soon as next month, three people with knowledge of the case said.
Criminal Action Is Expected for JPMorgan in Madoff Case
JESSICA SILVER-GREENBERG and BEN PROTESS – NYTimes.com
JPMorgan Chase and federal authorities are nearing settlements over the bank’s ties to Bernard L. Madoff, striking tentative deals that would involve roughly $2 billion in penalties and a rare criminal action. The government will use a sizable portion of the money to compensate Mr. Madoff’s victims.
***JM: JP Morgan… JP Morgan… where have I heard that name before?
Bubble? Schmubble. Real Problem Is Markets Don’t Work Anymore.
Michael J. Casey – MoneyBeat – WSJ
Relax. There is no stock bubble, at least not according to an army of Wall Street prognosticators who’ve weighed in on the issue recently. So why do so many on both Main and Wall streets still feel uncomfortable with the way markets are behaving? Maybe it’s because valuations aren’t what matter.
Hardships Linger for a Mending Ireland
On the rare days when John Donovan visits downtown Dublin, there is a buzz in the air: Streets bustle with pedestrians. “Sold” signs festoon Georgian brick buildings that had languished on the market for years. At Silicon Docks, a hub where Google, Facebook and other tech companies are clustered, crowds of taxis line up for easy fares.
Boutique bank that advised on ICE-NYSE deal plans expansion
Broadhaven Capital Partners, a 13-person investment bank that has advised on some of the biggest deals in the exchange space in recent years, is gearing up to expand.
Lawrence McCarthy, Who Saw Swaps Danger at Lehman, Dies at 49
Laurence Arnold and Mary Childs – Bloomberg
Lawrence McCarthy, a senior managing director at Cantor Fitzgerald LP who, as an executive at Lehman Brothers Holdings Inc., was said to have predicted that credit-default-swap traders were “working on bringing down the whole world,” has died. He was 49.
Vatican Cleans Up Financial Dealings but More to Be Done, Says Watchdog
A European anti-money-laundering watchdog Thursday lauded the Vatican for significant improvements in cleaning up its opaque financial dealings, boosting Pope Francis ‘ efforts to overhaul the Holy See’s finances after years of scandals.
Volcker Rule Got Tougher on Hedges, Softer on Trader Pay
Yalman Onaran – Businessweek
U.S. regulators made a few identifiable changes to the Volcker rule they approved yesterday after two years of lobbying and negotiation. One is the addition of the word “identifiable.”
Volcker Rule Looks Reasonable, Bank Analysts Say
Maureen Farrell – MoneyBeat – WSJ
The Volcker rule, as approved by regulators Tuesday, received high praise from Wall Street analysts Wednesday.
Regulators to Banks: Beware of Social Media
Stephanie Armour and Alan Zibel – MoneyBeat – WSJ
U.S. banks and other financial institutions that use Facebook, Twitter and other social media to drum up business or interact with consumers should have protections in place to guard against harming both customers and their own reputations, regulators said Wednesday.
ESMA Appoints New Securities Markets Stakeholders Group Members
ESMA appoints new Securities Markets Stakeholders Group members The European Securities and Markets Authority (ESMA) has announced the composition of its Securities Markets Stakeholder Group (SMSG) following its approval by ESMA’s Board of Supervisors.
Remarks Of CFTC Chairman Gary Gensler At A D.C. Bar Event – “A Transformed Marketplace”
European Commissioner Barnier Welcomes Trilogue Agreement On The Framework For Bank Recovery And Resolution
Exchanges & Trading Facilities
LSE partners with OTC risk start-up
Tim Cave – Financial News
The London Stock Exchange Group has partnered with a UK start-up offering risk management services for over-the-counter derivatives, as operators seek out emerging opportunities from the G20’s post-crisis regulatory agenda.
BME – MARF already has 6 members and 10 registered advisers
CME Group Inc. Declares Annual Variable Dividend of $2.60 Per Share
Moscow Exchange: Calculation Of Settlement Price Under USD/RUB FX Futures
Hedge Funds & Managed Futures
Black marks add up for Blackstone in India
Henny Sender and James Crabtree in Mumbai – FT.com
The patchy record of US private equity group Blackstone in India has been further dented by its holdings in Financial Technologies, a trading software maker for stock exchanges, whose sister company is mired in allegations of fraud.
Gold Drop Is Blow to Prominent Hedge-Fund Manager Sprott
Rob Copeland – WSJ.com
One of the world’s biggest gold bugs is getting crushed by the metal’s steep fall. The flagship fund of prominent Canadian hedge-fund manager Eric Sprott has dropped more than 50% this year in what will likely be the third consecutive year of double-digit percentage losses, according to documents sent to investors.
Hedge Fund Lions’ Den: Managers voice concerns over lack of investment
Margie Lindsay – Risk.net
Emerging managers get up close and personal with industry experts in episode four of Hedge Fund Lions’ Den. Aperios, Laurentia and Strategis have a chance to learn from the lions
BNSF CEO Rose shifts role, renewing Buffett succession talk
Berkshire Hathaway Inc’s BNSF Railway Co has moved Chief Executive Matthew Rose to an executive chairman role, renewing speculation he might be in line to replace Warren Buffett at Berkshire’s helm.
Have you noticed? Equities are the new bonds
Paul Murphy | FT Alphaville
We’ve infiltrated Citi’s European Credit Conference, underway in Westminster on Thursday. Updates follow, until we’re thrown out.
It’s all been about QE
Paul Murphy | FT Alphaville
The key news, on the ground, is that several speakers have fallen foul of the fog. Lots of flights into Heathrow have been cancelled. But we’ve had an opening address from Citi’s head of credit strategy, Matt King. Message: ‘Be modestly long the riskiest assets; trash is good, but position yourself close to the exit.’
Scene Last Night: Tudor Jones, Dubin at Breast Care Fete
Amanda Gordon – Bloomberg
Paul Tudor Jones said he’d be dead without his wife, who was being feted by a cancer charity in New York for evangelizing yoga to the young.
ClearVest Unified Investment Management Platform Now Open to Investors
ClearVest, an independent investment platform for investors and investment managers, today announced that its platform is officially open to investors seeking to expand their traditional investment portfolios with access to a diversified and unique offering of alternative investment products.
Thomson Reuters lists ANZ bonds on Fixed Income Trading
Thomson Reuters Corp. customer ANZ is now listing credit bond prices on its electronic bond trading platform, Thomson Reuters Fixed Income Trading.
Banks & Brokers
TD Bank Takes Top Spot for Total Assets
Alistair MacDonald – MoneyBeat – WSJ
Royal Bank of Canada is no longer Canada’s largest bank, measured by total assets. That crown now goes to cross-town rival Toronto-Dominion BankTD.T -0.81%, according to fillings that both banks made to the U.S. Securities and Exchange Commission.
Morgan Stanley’s Trading Technology Platform Speeds Time To Market For Quant Shops
Ivy Schmerken – Wall Street & Technology
With the rising cost and complexity of trading infrastructure, Morgan Stanley is offering systematic managers that use black box and quantitative trading strategies a comprehensive end-to-end solution.
JPMorgan’s Dimon Says Banks to Reprice Products
Hugh Son and Dawn Kopecki – Bloomberg
JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said banks will have to charge more for lending to get a “fair return” as regulators require the industry to set aside more funds to cushion against losses.
JPMorgan Chase to Spend $250 Million on Jobs Skills Initiative
RACHEL ABRAMS – NYTimes.com
When Mayor Rahm Emanuel of Chicago received a call earlier this year asking if he would support a new jobs initiative from JPMorgan Chase, he replied with his typical bluntness.
Jamie Dimon: Man of the World
David Reilly – MoneyBeat – WSJ
Wall Street exists in an echo chamber. And lately, some of the loudest echoes have been about the prospect of the Federal Reserve soon scaling back its bond purchases, with investors scurrying to and fro depending on talk of taper timing.
Citigroup adds director with hedge fund, banking experience
Citigroup Inc named Duncan Hennes, a co-founder of bank advisory firm Promontory Financial Group and a former CEO of Soros Fund Management, to its board of directors on Wednesday.
Fast-growing brokerage buys US rival
Harriet Agnew – Financial News
Makor Capital, a brokerage set up two years ago by former senior executives from Cantor Fitzgerald, has signed a deal to buy Oscar Gruss & Son, a New York-based rival.
Clearing & Settlement
Commerzbank signs with REGIS-TR as trade repository for EMIR
Commerzbank has chosen REGIS-TR, the European Trade Repository owned by Clearstream (Deutsche Börse Group) and Iberclear (BME) as their provider of trade reporting services, ahead of the European Market Infrastructure Regulation (EMIR) obligation to report over-the-counter (OTC) and listed derivative transactions.
Daiwa Europe Transfers Repo Business to Torstone’s Inferno
Marina Daras – WatersTechnology
Torstone Technology, a London-based provider of derivatives processing software, announced it has migrated Daiwa Capital Markets Europe’s clearance and settlement repo business onto its back-office processing platform, Inferno.
Calypso Extends Clearing Solution to Support SEF Connectivity
Marina Daras – WatersTechnology
Software vendor Calypso Technology has announced it has extended its over-the-counter (OTC) clearing solution for end-users to support swap execution facility (SEF) connectivity.
TriOptima’s triResolve Service Leads In OTC Commodity Portfolio Reconciliation With Over 500,000 OTC Commodity Trades From 80 Energy And Financial Firms
Indexes & Products
[TSE] ETF/ETN Monthly Report for Nov 2013
SGX: No Changes To STI After Quarterly Review
Oslo Børs: Changes To The Composition Of The OBX Index From 20 December
iSTOXX Efficient Capital Managed Futures 20 Index: November 2013 – Monthly Report & Commentary
Two Companies To Join FTSE 100 Index
Current Analytical Software Constrains Big Data Solutions in the Financial Industry
Bill Kantor – Wall Street & Technology
What is needed is a new software paradigm that enables analytics to just work and work fast—without having to move the data or worry about size
Energy Data Hub Leverages Key Technology And Business Partnerships To Enhance Pricing Transparency And Trading Efficiencies
Efforts To Boost Innovation And Market Participation Enhanced By Sapient Global Markets, OTC Online, And International Securities Exchange
DataArt Upgrades Free Form PF Software To Support AIFMD Reporting Requirements
Custom Software Developer Unifies Regulatory Data Compilation For One Automated Filing Solution
SunGard’s Apex Collateral Wins FOW International Award For Best New Collateral Management Product
SunGard’s Apex Collateral was selected as the best new collateral management product in the 2013 FOW International Awards, which recognizes the key innovators and product launches in the global derivatives industry.
Numerix Takes First Place in the 2013 Risk Technology Rankings for CVA, FVA & DVA Calculation For Third Consecutive Year
Numerix, the leading provider of cross-asset analytics for derivatives valuations and risk management, today announced that it has won first place in the Risk Magazine Technology Awards 2013 for the individual categories of “Enterprise Risk Management” – Credit Valuation Adjustment, Debt Valuation Adjustment and Funding Valuation Adjustment calculations and “Pricing Analytics” – Structured Products.
Options Announces 10G Connectivity To The New Eurex EOBI Market Data Feed
Options, the leading private financial cloud provider for the global capital markets industry, has today announced a further expansion of its suite of market data feeds to include fully resilient 10G connectivity to the new Eurex Enhanced Order Book Interface (EOBI) feed. The new service, designed for latency sensitive market participants, will be available to customers collocated in Equinix FR2 and across Europe.
Eagle Alpha launches Web-sentiment service for buy-side
The buy-side can now access global macroeconomic investment intelligence derived from online sources, thanks to a new product launched by Eagle Alpha.
DataArt Upgrades Free Form PF Software to Support AIFMD Reporting Requirements
R.B.S. to Pay $100 Million to Settle Inquiries Into Violations of Sanctions
MATTHEW GOLDSTEIN – NYTimes.com
The Royal Bank of Scotland is paying $100 million in fines to New York and federal banking regulators to settle civil investigations into accusations that some of its former employees helped conceal transactions involving customers from Iran, Sudan and other nations subject to international sanctions for about a decade.
Five years later, aide recalls Madoff’s arrest on witness stand
Exactly five years ago, Frank DiPascali was awakened in his New Jersey home by an early call from his boss, Bernard Madoff. “He said, ‘Frank, the FBI is in the office with my brother,'” DiPascali said in federal court in New York on Wednesday. “I said, ‘Why are you calling me?’ And I threw my phone across the room.”
Key witness against SAC’s Steinberg finishes testimony
The government’s star witness in its insider trading case against SAC Capital Advisors’ Michael Steinberg faced a final day of questioning on Wednesday, as lawyers sparred over whether he was a credible cooperator or a liar.
Japan’s Financial Services Agency: Administrative Action Against Deutsche Securities Inc.
Environmental & Energy
Exxon forecasts natural gas to be world’s second most-used fuel
Natural gas will overtake coal as a global energy source in the middle of the next decade, in part because of the environmental benefits it offers, according to ExxonMobil, the world’s largest oil and gas company.
Fracking Boom Pushes U.S. Oil Output to 25-Year High
U.S. crude production rose to the highest level in a quarter-century as a shale drilling boom in states such as Texas and North Dakota cut the need for foreign oil and pushed the country closer to energy independence.
Industry launches EU backloading challenge
Europe’s heavy industry is firing a barrage of legal challenges to cuts in the carbon permits they will get up to 2020 – subsidies worth over 4 billion euros ($US5.5 billion) – with at least nine firms opening the assault in a Dutch court.
Investment-Banking Revenue Falls in China
Enda Curran – WSJ.com
Investment-banking revenue in China this year has slumped to its lowest level since 2009, even as overseas takeovers and bond sales by companies in the world’s second-biggest economy rose to record levels.
Japan cabinet approves $53 bln extra budget to fund stimulus
Japanese Prime Minister Shinzo Abe’s cabinet approved on Thursday a $53 billion extra budget for the current fiscal year to fund stimulus steps announced last week aimed at offsetting the blow from a planned increase in the national sales tax.
Landmark HK court order forces insider trader to compensate investors
A former Morgan Stanley banker convicted of insider trading will have to pay more than 290 investors a total of HK$23.9 million ($3.08 million) they lost out on, a Hong Kong court ordered on Thursday, in an unprecedented legal ruling.
Demand generated from emerging-market growth helps boost Australian market growth, says Aite Group
New research from Aite Group in its report, The Australian Capital Market: Dichotomy and Duopoly, shows that due to solid economic fundamentals and demand from its high-growth trading partner, China, the Australian economy and equity market showed resiliency throughout the global financial crisis, avoiding the dramatic drops in trading volume seen in the United States and Europe.
Russian investment banking: special focus
Euromoney explores the changing face of Russian finance, with a new generation of firms competing with established players in a crowded investment-banking scene. Coverage includes macro risk, Sberbank’s investment-banking dynamo, Renaissance Capital’s great expectations, the consumer-banking boom and the commodities cycle.
Bursa Malaysia Launches Electronic CDS Statements And Notices
All CDS Account Statements And Other Notification Accessible Electronically From Bursa Malaysia
African Securities Exchanges Association Newsletter – November 2013 Edition