First Read

Proposed Rule Limits Size of Commodities Traders’ Positions
ALEXANDRA STEVENSON – NYTimes.com
In 1979, Nelson Bunker Hunt and William Hunt famously bought up as much silver as they could in the commodities market. By the time they were done, the brothers had acquired more than a third of the world’s supply of silver, sending the price of the precious metal soaring. Citing the Hunt brothers’ attempt to corner the market more than three decades ago, the Commodity Futures Trading Commission on Tuesday voted 3 to 1 to limit the size of any trader’s footprint in the commodities market.
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***** So if we are solving the problems of the 1970s finally, when will they get to the problems of the financial crisis of 2008?

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CFTC anti-speculation plan may not be so tough, data shows
Tom Polansek and Douwe Miedema | Reuters
A new plan to curb commodity speculation could prove to be far less rigorous than feared by markets, data provided by the world’s largest futures exchange the CME Group Inc showed. Under a proposal by the Commodity Futures Trading Commission, the maximum position traders would be allowed to hold in derivatives could dramatically rise rather than tighten sharply, the numbers showed.
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***** Since we referenced the 1970s above, let me say free markets for free men just got a lot less free. And where did all these women come from?

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NYSE’s Next Owner Says Small U.S. Investors Get Ripped Off
Matthew Leising – Bloomberg
head of IntercontinentalExchange Inc. (ICE), which is about to own the New York Stock Exchange, said U.S. equity markets are flawed because sophisticated traders are taking advantage of small investors.
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***** The equities market structure is an abomination. Dark pools are a travesty as currently operated. The SEC is asleep at the wheel. These markets must be fixed by some adults with a clue.

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From Our Man In Chicago, FIA Expo 2013, Tom Groenfeldt: Trading In Asia
MondoVisione
Asian experts at the Trading Asia meeting ahead of the FIA opening in Chicago were wary of making generalizations about the Asian markets. Except for really, really broad generalizations. Asia is 4 billion people, a third of the earth’s land and the markets are very fragmented said Lynette Lim, CEO of Phillip Futures USA. She said Asia offers two types of trading in equities — directional and arbitrage across markets.
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***** Standing room only for yesterday’s pre-EXPO panel by Phillip Futures USA that I moderated.

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MF Global Customers Will Recover All They Lost
BEN PROTESS – NYTimes.com
Two years after $1.6 billion vanished from their accounts, MF Global’s customers are now all but assured to collect every last penny. A federal bankruptcy court judge approved a plan on Tuesday that would close the remaining shortfall for some 20,000 customers, many whose lives were derailed when their money disappeared in the firm’s final days.
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***** This is not the way it is supposed to happen per se, but it is the result that is supposed to happen.

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Trading Technologies ends eSpeed dispute
Neil Munshi in Chicago and Philip Stafford in London – FT.com
Trading Technologies, the world’s largest technology provider for futures trading, is to reconnect its customers to eSpeed, the US electronic bond trading platform, in a move that brings an end a decade-long dispute between the two parties.
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***** My favorite song is “Let there be Peace.” Let there be Peace on Earth and Let it Begin with Me. Or, in this case, let it begin with TT and Espeed.

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New All-time Record — 736,445 Avg. Daily Volume for VIX Options in October
VIX Views
Options on the CBOE Volatility Index set a new all-time record for average daily volume in a month, with average daily volume of 738,445 in October.
www.spvixviews.com/2013/11/05/new-all-time-record-736445-avg-daily-volume-for-vix-options-in-october-by-matt-moran/

***** I always worry about VIX records. Is that an increase in fear or a reduction in fear? And how does Sully the Monster fit into all this fear.

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OneChicago Names Waseem Barazi Chief Regulatory Officer
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MarketAxess Appoints William Cruger to Board of Directors
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Barchart Launches Mobile App for Android Phones with Live Futures Trading and Streaming Real-Time Market Data
Barchart.com, Inc., a leading provider of market data and information, today announced the release of the mobile version of their flagship market data and commodities trading platform, Barchart Trader.
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In Surprise Exit, Bart Chilton to Depart Futures Commission
BEN PROTESS and ALEXANDRA STEVENSON – NYTimes.com
Bart Chilton, the outspoken regulator whose colorful commentary on financial risk taking positioned him as a fierce critic of the industry he helped oversee, announced on Tuesday that he was leaving his post at the Commodity Futures Trading Commission. The move is the latest sign that Wall Street’s scrappiest regulatory agency is poised for a makeover.
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***** I am so shocked by this that my hair turned white, and long in the back.

***JM: Best of luck, Bart! If you’re ever in northern Norway, drop by. We can talk about cause & effect, and Starsky & Hutch. Add aquavit, should be fun.

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Bart Chilton – regulator, rock fan and raconteur
Gregory Meyer in New York – FT.com
Run free, cheetahs. Bart Chilton is leaving the savannah. The longest-serving commissioner at the US Commodity Futures Trading Commission, who likens high-frequency traders to the big cats, is stepping down after six years.
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***** The Cheetah hunter heads into a new savanna.

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CTAExpo announces Program and Speakers for 2013 Emerging Manager Forum Miami
CTAExpo has announced the program and speakers for our Emerging Manager Forum Miami 2013 conference, December 3 at the FontaineBleau Miami Beach. The core of the Emerging Manager Forum Miami agenda is timely, cutting edge information that will help traders manage and grow their business successfully and capital sources more effectively select investments for their portfolios.
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***** The other EXPO.

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MarketsWiki

MarketsWiki Page of the Day
Bart Chilton
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MarketsWiki Recent Updates

Statistics

StatsGoOnThisLine
MarketsWiki Statistics

Lead Stories

CBOE to take time extending VIX options trading hours -CEO
Reuters
CBOE Holdings Inc will not rush to expand trading hours for options on the CBOE Volatility Index after implementing an extended trading schedule for futures in recent days, Chief Executive Officer Ed Tilly said on Tuesday.
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Asian exchanges tap derivatives demand
Neil Munshi in Chicago – FT.com
Executives from major Asian derivatives exchanges are seeing increased demand from overseas traders seeking exposure to China and other emerging markets, as the hyper-competitive US environment sends investors abroad for opportunities.
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Borsa Istanbul CEO Says Nasdaq OMX May Buy Exchange Stake
Benjamin Harvey & Taylan Bilgic – Bloomberg
Ibrahim Turhan, the chief executive officer of Borsa Istanbul, said the Nasdaq OMX Group Inc. is considering buying a stake in the bourse as part of a partnership that will be announced as early as next month.
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Javelin’s SEF Amends its MAT Filing; Uncertainty Lingers
Ivy Schmerken – Wall Street & Technology
As SEFs work their way through the regulatory process, uncertainties abound in the made-available-to-trade area. Last Thursday, Javelin Capital Markets amended its filing with the Commodity Futures Trading Commission related to which interest rate swaps it will make available to trade on its SEF.
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CME threatens to flee US as regulators challenge liquidity of US Treasury collateral
Lukas Becker, Duncan Wood – Risk.net
CME Group has threatened to move “a significant portion” of its clearing business offshore, after US regulators started challenging the liquidity of US Treasury collateral. Proposals from the Commodity Futures Trading Commission (CFTC) could force central counterparties (CCPs) to back US bonds with cash – but other jurisdictions are taking a softer line, CME claims, potentially putting it at a disadvantage to rivals overseas.
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After SAC Plea, Fellow Funds May Pay
ALEXANDRA STEVENSON – NYTimes.com
In striking its $1.2 billion settlement with SAC Capital Advisors, the government set a record for insider trading penalties. For the hedge fund industry, the hidden costs of the deal are even bigger.
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U.S. regulators to review BlackRock, Fidelity for risks
Reuters
U.S. regulators will review whether asset managers including BlackRock Inc. and Fidelity Investments pose a potential risk to the financial system, Bloomberg News reported late Tuesday.
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New York Is Investigating Advisers to Pension Funds
MARY WILLIAMS WALSH – NYTimes.com
Public pensions in New York State have some of the most reliable funding in the country, but what happens to the money once it is in the pension system can be less clear-cut.
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Exclusive: EU to fine Deutsche, JPMorgan and others in rate probe – source
Reuters
EU antitrust regulators are set to fine six global banks including Deutsche Bank, JPMorgan and HSBC after an investigation into the rigging of benchmark euro zone interest rates, a person familiar with the matter said on Tuesday.
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Increased Hacking and Data Leaks Drives Renewed Focus on Board Communications – WSJ.com
Thomson Reuters annual Board Governance survey shows that Board communications is becoming increasingly complex yet outdated board procedures, unsecure distribution channels and costly board materials are all contributing to increased security gaps.
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Regulatory

CFTC Proposes New Position Limit Rules: Addresses Absolute Limits of 28 Core Futures Products, Aggregation, and Bona Fide Hedging
Gary DeWaal
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CFTC Issues Proposed Rule to Require All Registered Introducing Brokers, Commodity Pool Operators, and Commodity Trading Advisors to Become and Remain Members of a Registered Futures Association
The Commodity Futures Trading Commission (CFTC or Commission) proposed a rule today to amend its regulations to require that all persons registered with the Commission as introducing brokers (IBs), commodity pool operators (CPOs), and commodity trading advisors (CTAs) become and remain members of at least one registered futures association (RFA). Currently, the National Futures Association (NFA) is the only RFA.
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CME Group’s Statement on CFTC’s New Position Limits Proposal
CME Group, the world’s leading and most diverse derivatives marketplace, today released the following statement in response to the CFTC’s new position limits proposal. “CME Group supports position limits in our markets and always has. However, we do not believe the proposed rules, which require that federal position limits be set and implemented by the CFTC, are warranted or necessary, particularly outside of the spot months.
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Derivatives industry under the gun to amend contracts
Reuters
Central bankers and regulators have increased the pressure on the $630 trillion derivatives industry to alter how it operates to avoid a repeat of the mayhem seen after Lehman Brothers collapsed.
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Maijoor steers Esma through a regulatory storm
Anna Irrera – Financial News
Few could accuse the European Securities and Markets Authority of wasting time in setting about the sprawling task of helping to shore up Europe’s financial regulatory system since its creation nearly three years ago.
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SEC Names David Glockner as Director of Chicago Regional Office
Mr. Glockner spent 25 years as a criminal prosecutor in the U.S. Attorney’s Office for the Northern District of Illinois, including 11 years as chief of the criminal division. Since last year he has led the Chicago office of digital risk management and investigations firm Stroz Friedberg LLC.
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SEC To Hold Roundtable On Proxy Advisory Services
The Securities and Exchange Commission today announced that its staff will host a public roundtable on December 5 to discuss the use of proxy advisory firm services by institutional investors and investment advisers.
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FCA’s commissions review puts spotlight on sellside
Michelle Price, Sarah Krouse and Joe McGrath – Financial News
The UK brokerage world is unlikely to escape unscathed as the $22 billion investment research industry undergoes its biggest shake-up in a decade, regulatory experts have warned.
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CFTC Approves Position Limits Proposals
Press Release
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Opening Statement Of CFTC Chairman Gary Gensler: Open Meeting To Consider Position Limits
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“At Last” Statement Of CFTC Commissioner Bart Chilton, Dodd-Frank Meeting On Position Limits
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Exchanges & Trading Facilities

Newedge to provide execution and clearing for London start-up GMEX
Reuters
Brokerage Newedge, a joint venture between Societe Generale and Credit Agricole’s Corporate and Investment Bank, said on Tuesday it plans to offer execution and clearing services for start-up exchange group GMEX.
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ICE CEO says he hopes NYSE transaction will close within days
Reuters
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IntercontinentalExchange Reports 3Q13 Adjusted Diluted EPS of $1.97, +10% yty; Adjusted Net Income Attributable to ICE of $145MM
IntercontinentalExchange, Inc. (NYSE: ICE), a leading operator of global markets and clearing houses, today reported financial results for the third quarter of 2013. Consolidated revenues were $338 million, an increase of 5% from the third quarter of 2012. Consolidated net income attributable to ICE was $141 million, up 8% from the third quarter of 2012, and diluted earnings per share (EPS) increased 7% over the third quarter to $1.92 on a GAAP basis.
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NYSE chief hails ‘excellent foundation’ for Ice merger
Tim Cave – Financial News
Duncan Niederauer, the chief executive of NYSE Euronext, hailed the “excellent foundation” set by the exchange group during the third quarter for its $10 billion takeover by rival operator the IntercontinentalExchange.
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BlackRock’s Aladdin Bond Executive Rejoins MarketAxess
Katy Burne – Dow Jones
Richard Schiffman has rejoined MarketAxess Holdings Inc. after three years helping to build out BlackRock Inc.’s recently shelved bond platform, the Aladdin Trading Network.
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NYSE Euronext Announces Third Quarter 2013 Financial Results
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CME Group Inc. Declares Quarterly Dividend
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BM&FBOVESPA Publishes October Market Performance
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ASX Group Monthly Activity Report – October 2013
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ASX Compliance Monthly Activity Report – October 2013
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Irish Stock Exchange Statistics October 2013
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NZX October 2013 Shareholder Metrics
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TMX Top 20 Largest Consolidated Short Position Report – October 15, 2013
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ATHEX Monthly Statistical Bulletin October 2013
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Hedge Funds & Managed Futures

Commodity investment goes back to fundamentals
Gillian Carr – Risk.net
The past year has not been a good one for commodity investment. Passive commodity indexes have delivered disappointing returns, while a number of high-profile commodity hedge funds have been forced to close. What is the outlook for investor interest in commodities?
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Hedge fund service provider rankings 2013 reveal surprises
Hedge Funds Review – Risk.net
Service providers play a vital role for hedge funds facing regulatory and market changes. Voting in the 2013 rankings reveal the companies that have garnered the confidence of the industry
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Rothschild Investment Partners closes fund after missing target
Nick Kostov – Financial News
Edmond de Rothschild Investment Partners has closed its BioDiscovery 4 venture capital fund after raising E192 million, missing its target of raising E200 million by the close of 2012.
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Quant funds suffer dismal ‘QE’ losing streak
Sam Jones – FT.com
How does a hedge fund react to losing a quarter of its investors’ money in a matter of months? Double-up? Blow up? Or buy Lego and wait? Cantab Capital, a multibillion-dollar quant hedge fund, run by computers (or rather, run by maths geeks who run computers) went for option three.
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Banks & Brokers

Bank of England Welcomes New Blood from Barclays
Jason Douglas – MoneyBeat – WSJ
Forecasting the British economy is a tricky and thankless task. And according to a review by one former Federal Reserve official, the Bank of England has plenty of room for improvement, both in forecasts and communication. So step forward one Simon Hayes, Barclays chief U.K. economist, whose hire the Bank of England confirmed Tuesday.
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ING to Speed Up Restructuring
WSJ.com
Dutch bank ING Groep NV Wednesday said its restructuring must be completed two years earlier than previously planned as it was given more leeway on the difficult sale of its life-insurance business in Japan.
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Big name hires depart Macquarie Capital
Matt Turner – Financial News
Australian bank Macquarie Capital has pared back parts of its European advisory business outside of its four key sectors – changes that have led to the departure of its two of its most high-profile hires of the past few years.
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MyTreasury Wins 2013 Treasury Management International Money Market Fund Dealing Portal Award
MyTreasury, a leading multi-product cash investment portal, today announced it has been awarded the 2013 Treasury Management International Best MMF Dealing Portal award. This is the sixth consecutive year MyTreasury has won this award, as voted by the readers of Treasury Management International (TMI).
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Clearing & Settlement

DTCC Receives Approval To Operate Trade Repository In Singapore
The Depository Trust & Clearing Corporation (DTCC) today announced that on 1 November 2013 it had received approval from the Monetary Authority of Singapore (MAS) to operate a global trade repository (GTR) that supports reporting of over-the-counter (OTC) derivatives trades under the jurisdiction of MAS. The first bank commenced reporting on 4 November 2013.
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Indexes & Products

New Deutsche ETF taps into China’s onshore market
Reuters
Foreign investors looking to access China’s onshore market will have a new avenue starting on Wednesday when Deutsche Asset & Wealth Management launches the first ETF targeting direct exposure to shares of companies incorporated in mainland China.
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Tokyo Stock Exchange: Start Of Calculation And Publication Of New Index “JPX-Nikkei Index 400”
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Technology

CameronTec Embeds Object Trading’s Global DMA Platform to Expand Catalys Market Access
CameronTec, the global standard in FIX connectivity incorporating trading technology and professional services, today announced a joint offering agreement with leading direct market access provider, Object Trading. Through this unique technology and services cooperation CameronTec will expand its FIX-based Catalys Market Access offering to more than 60 equity, derivative and FX markets across the globe, as a locally deployed or managed / hosted service.
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Tradesignal releases Version 7 – great advances in user-friendliness and strategy development
The most notable feature is the new user interface, enabling easier and faster access to Tradesignal’s many functions. Areas have been completely redesigned in order to improve these functions.
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PTS Partners selects OneTick for quantitative investing | Financial Industry & Algorithmic Trading News
Automated Trader
OneMarketData has announced that quantitative fund PTS Partners has implemented OneTick, a single solution for stream processing and tick data that spans both historical and real-time, to support the firm’s quantitative investment strategies.
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Enforcement

CFTC Charges Illinois Resident, CME Floor Broker and Trader James C. Yadgir with Violating Live and Feeder Cattle Futures Speculative Position Limits
As the CFTC approved the CME speculative position limits for both futures contracts, the Complaint alleges that Yadgir, a CME Floor Broker and Trader, violated the Commodity Exchange Act, which prohibits any person from holding futures contract positions or options on such contracts in excess of established CFTC-approved speculative position limits.
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S.E.C. Clamping Down on Issuers of Bonds
REUTERS
Federal securities regulators on Tuesday fined a municipal debt issuer for the first time, accusing the seller of bonds used to finance an ice rink that ultimately fell into default with misleading investors about the project’s viability.
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U.S. judge won’t rubber-stamp SAC insider trade decision | Reuters
A Manhattan federal judge signaled on Tuesday that he will not rubber-stamp a central component of billionaire Steven A. Cohen’s SAC Capital Advisors LP’s record $1.2 billion insider trading settlement with the government, saying he needs more information about the accord’s fairness.
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Environmental & Energy

National carbon market ‘cheaper for China’
Reuters Point Carbon
China, the world’s biggest emitter of greenhouse gases, could cut the cost of achieving its emissions target by a fifth by moving away from provincial targets to a nationwide emissions trading market, according to reports across the weekend.
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China May Start More Carbon-Trading Markets by Year-End – Official
The Wall Street Journal
China will likely start carbon emissions trading in Beijing, Shanghai and Guangdong province by the end of this year, as part of efforts to control emissions and combat climate change, a senior planning official said Tuesday.
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Global action needed to close 8-12 bln tonne emissions gap -UNEP
Reuters
Greenhouse gas emissions in 2020 will be 8 billion to 12 billion tonnes more than the level needed to keep global warming to only 2 degrees Celsius and avoid severe climate change, a United Nations report estimated on Tuesday.
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Asia-Pacific

SGX Proposes Changes To Derivatives Clearing Fund And OTC Financials Default Management
Singapore Exchange Derivatives Clearing Limited (SGX Derivatives Clearing) is proposing refinements to its Clearing Fund structure, and improvements in the auction process for managing a default of a Member that clears over-the-counter financial (OTCF Contracts) derivatives.
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China’s Leaders Confront Economic Fissures
KEITH BRADSHER – NYTimes.com
The two-story employment complex here, like job centers across China, is crowded with educated young people who are trying to figure out their futures in a country where the job market still prizes assembly-line workers willing to labor monotonous hours on backless stools.
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Japan Securities Clearing Corporation Awarded Asia Risk’s “Clearing House Of The Year”
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Thailand Futures Exchange Changes Pre-Open Trading Hours On Nov 6
The Thailand Futures Exchange PCL (TFEX), under the Stock Exchange of Thailand group, announces that the pre-open trading of the morning sessions of derivatives market will be delayed from 09.15 hours due to transaction disruption. TFEX is solving problem and trading resumption will notify later.
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HKEx Monthly Market Highlights – October 2013
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HKEx On-Floor & Off-Floor Trading Statistics
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HKEx 2013 Third Quarter Condensed Consolidated Financial Statements
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Frontier Markets

Analysis: Cracks start to show in frontier markets
Reuters
Three years ago, a trip to the Southern Kenya production facilities of Canadian company Africa Oil attracted only seven potential investors. Two months ago, 60 boarded the flight.
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Actis west Africa head departs after fundraising
Alec Macfarlane – Financial News
The head of west Africa at emerging markets-focused private equity firm Actis has left, in a move that comes shortly after the close of its fourth global fund.
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India, still definitely not China, but investment showing at least some flutters of life
David Keohane | FT Alphaville
A few charts and some commentary plucked from a rather bullish note on India from Goldman’s Asia Pacific team:
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