First Read

MWE Chicago 2016

MarketsWiki Education World of Opportunity Series 2016 Schedule Announced
4th Annual Education series will stop in four cities in 2016; CME Group returns as Global Premier sponsor

Do you want to help the next generation?

The 4th Annual MarketsWiki Education World of Opportunity series is coming to five cities in 2016, including Chicago on July 12th, 14th and 15th, New York on July 19th and London, Paris and Frankfurt in late October. Interns, new employees and anyone interested in learning more about the past, as well as present opportunities and careers in the capital and derivatives markets should attend. Registration for the Chicago and New York events is now open.

The goal of the series is very simple. We bring together industry professionals to share information, stories and ideas about our financial markets with the next generation – students and young professionals. With short, personal and insightful presentations, we educate, inspire and aim to attract these students to the financial markets.

Got a summer intern or young professional who would benefit from learning more about our industry? Send them our way.

Chicago
The Chicago 3-session series will be held on July 12th and 14th at the CME Auditorium, 20 S. Wacker Drive, and July 15th at Trading Technologies, 222 S. Riverside. This year’s speakers include: Walt Lukken (FIA), Gerry Corcoran (RJO), Karen Wuertz (NFA), Peter Nabicht, Julie Holzritcher (CME Group), Kate Maehr (Greater Chicago Food Depository), Rumi Morales (CME Group), JJ Kinahan (TD Ameritrade), Drew Shields (Trading Technologies) and Jeff Levoff (DRW) among others.

New York
The New York 2-session series will be held on July 19th at the Nasdaq Marketsite at 4 Times Square, and will feature: Adena Friedman (Nasdaq) Kristin Boggiano (WIND), Jenny Knott (ICAP), Steve Gibson (Euclid Opportunities), Gary DeWaal (Katten Muchin Rosenman LLP), Bill Harts (Modern Markets Initiative), Neal Brady (Eris Exchange) and Kenny Polcari (O’Neil Securities) with more speakers to be named shortly.

Europe
We will continue this global series with events in Paris on October 25th, Frankfurt on October 27th and London on October 31st. Venues and speakers will be named soon.

The MarketsWiki Education World of Opportunity series was launched in Chicago in 2013. To date, we have had more than 100 speakers from the financial industry deliver presentations to almost 1,000 attendees. Send us your interns and young professionals – who will build the next generation financial industry.

You can find videos from all our events on the MarketsWiki Education YouTube channel

We thank the CME Group for being the Global Premier Sponsor of the series. We also thank the CBOE, OCC, Nasdaq, Barchart, Trading Technologies and The IFM for being event sponsors for the series.

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CME Group to Present Scholarships to 77 Chicago Public School Seniors at the 31st Annual Mayoral Award Program Luncheon
CME Group
Chicago Mayor Rahm Emanuel will join CME Group’s CEO Phupinder Gill in honoring 77 high-achieving Chicago Public School high school seniors. The students were selected based on essays they wrote about innovation, as well as their academic standing and extracurricular activities. Each student will receive a $1,000 achievement award and a select number of students also will receive summer internships at CME Group clearing firms.
goo.gl/1EjgTL

***** There are some things exchanges do that just warm your hearts, and theirs.

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Intercontinental Exchange Promotes Mayur Kapani to Chief Technology Officer
ICE
Intercontinental Exchange (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced Mayur Kapani has been promoted to Chief Technology Officer (CTO) for the company.
goo.gl/oQzqij

****** No luncheon for this Mayur, but a promotion will do.

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Sponsored Content

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SGX enters into exclusive discussions with the Baltic Exchange
SGX
Singapore Exchange Limited (SGX) wishes to announce that it has entered into an agreement with The Baltic Exchange Limited (Baltic Exchange) through which SGX will enter into exclusive discussions with the Baltic Exchange regarding a cash offer for 100% of the share capital of the Baltic Exchange (Transaction). This follows SGX’s announcement on 26 February 2016 that it had submitted a non-binding bid for the acquisition of the Baltic Exchange. The period of exclusivity will commence on 25 May 2016 and expire on 30 June 2016.
goo.gl/F6EhTv

****** But who is going to buy Mediterranean Avenue?

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The Occupy Movement Comes of Age
by Ben Geier – Fortune
A group called Take on Wall Street is launching a campaign focused on limiting the power of banks.
goo.gl/cXdVMY

***** Interesting look at the impact of the Occupy movement on the current presidential election.

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Third annual FTSE Russell survey signals smart beta turning point for asset owners
London Stock Exchange Group
FTSE Russell today confirmed a turning point in the consideration and implementation of smart beta indexes among global institutional asset owners. According to its third annual global institutional market survey – Smart Beta: 2016 Global Survey Findings from Asset Owners – FTSE Russell confirms that the percentage of asset owners currently evaluating smart beta has doubled from 15% at the first survey in 2014 to 36% in 2016, and 62% of asset owners with an existing smart beta allocation are now evaluating additional allocations.
* 72% of asset owners are using or actively evaluating smart beta
* 62% with existing smart beta allocations evaluating additional indexes
*Percentage using five or more smart beta indexes up 10 fold in 2 years
bit.ly/1s7iYav

***DA: Smart beta was once called “the flavor of the month” but it has remained on top of the menu for three years straight.

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Nasdaq Futures Exchange Hits A Record
The Nasdaq Futures Exchange, launched last July, reported single day volume record of 152,503 contracts and it topped 12 million contracts since launch, with record open interest over 900,000 contracts. May’s WTI average daily volume is 24,268 and up from April’s 8,009 contracts.
The ratio of Volume on NFX is 70% CLOB and 30% Block and volume continues to grow 20 percent month-over-month on NFX.
**Via email. Volumes provided by NFX

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More Young Adults Living With Parents Than a Romantic Partner; Researchers cite less desire to settle down, declining employment among young men
By Jennifer Levitz
For the first time in the modern era, young adults are more likely to live with their parents than with a spouse or partner, according to a new study by Pew Research Center.
goo.gl/PPXfPT

***** Funny story. My mother-in-law moved into my home for a couple of days, which brought new meaning to this story.

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Tuesday’s Top Three
Several stories received an outsized number of clicks yesterday, but one outshone them all, CME Upgrade Soothes Critics Who Viewed Prior System as Unfair. Runner up was Forbes’ Tim Worstall and his commentary with the titillating title This Libor Case Is Important, It Could Bankrupt The World’s 16 Biggest Banks. Rounding out the top three was a first for us since we began this daily exercise – a threepeat. Readers keep clicking over to the BI story, A brutal remark from a high-speed trader tells you everything you need to know about where Wall Street is headed, which summarized a recent explanatory video published by the Modern Markets Initiative

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Lead Stories

CFTC Closes U.S. Banks’ Loophole on Swaps; New rules will limit banks’ ability to move swaps business overseas
By ANDREW ACKERMAN and GABRIEL T. RUBIN – WSJ
U.S. banks lost the ability to shift some of their swaps business overseas under rules adopted Tuesday that aim to close a legal loophole.
goo.gl/LLJ4rM

Why the Law Failed to Punish Wrongdoers in the Financial Crisis
By Noah Feldman – Bloomberg
Historians of the future will want to know why almost no one went to jail in connection with the collapse of mortgage-backed securities that triggered the 2007-8 financial crisis. Monday’s appeals court decision reversing a $1.2 billion fraud judgment against Bank of America will be an important part of the answer. To put it bluntly, the law failed — because the law as it existed didn’t properly anticipate or cover the events that occurred.
goo.gl/uJiUkj

Barchart names Mark Haraburda as CEO
Barchart.com
Today, Barchart, a leading provider of financial market data and technology, announced that Mark Haraburda has been named CEO. Haraburda, 38, has served as Managing Director of Business Development and Sales for Barchart since 2007.
goo.gl/xrku0H

Citigroup, Japanese Affiliates Ordered to Pay $175M by CFTC to Settle LIBOR, Euroyen TIBOR Violations
Press Release
The U.S. Commodity Futures Trading Commission (CFTC) issued an Order today filing and settling charges against Citibank, N.A.; Citibank Japan Ltd. (CJL); and Citigroup Global Markets Japan Inc. (CGMJ) (collectively, Citi and its affiliates) relating to abuses of the London Interbank Offered Rate (LIBOR) and the Euroyen Tokyo Interbank Offered Rate (Euroyen TIBOR) benchmarks.
bit.ly/22oVslR

Hedge funds: Overpriced, underperforming; The industry has ballooned thanks to pension funds. Now institutional investors are taking a look at costs and returns
John Authers and Mary Childs – FT
It was the shot heard around the hedge fund world. After the New York City Employees’ Retirement System decided to cash all its investments in hedge funds, Letitia James, the city’s public advocate, delivered a message to the industry straight out of Occupy Wall Street: “Let them sell their summer homes and jets and return those fees to their investors.”
/goo.gl/48qm5U

The Hedge Fund That Couldn’t Stay Open Long Enough for a Big Payday
Tom Beardsworth, Alastair Marsh – Bloomberg
Money managers forced to unwind bets against Portuguese bank; Funds in retreat miss out on paydays of almost $70 million
Toby Dodson waited six months for his bet against a fragile Portuguese bank to pay off.
goo.gl/amusw9

Buyside traders beware: outsourcing set for revival
By Tim Cave – Financial News
The idea of outsourcing non-essential functions is already a common theme in wholesale finance, as buyside firms and investment banks reduce costs to concentrate on client service and areas where they have a competitive advantage.
goo.gl/im1PBd

US Treasury clearing house eyes HFT access; Non-banks take increasing role in world’s largest government bond market
Joe Rennison in New York – FT
The largest clearing house for US Treasuries is looking into allowing high-frequency trading firms to have access to it, as non-banks that rely on speed and technology take an increasing role in the world’s largest government bond market.
/goo.gl/mgXT7F

Big Banks Ladle On the Risk; Increase in block-trade deals ramps up exposure of Wall Street firms
By CORRIE DRIEBUSCH – WSJ
Hungry for revenue, Wall Street banks are taking on more risk to help companies sell large chunks of stock.
goo.gl/f3O1RT

Signals from the U.S. Yield Curve: World Can’t Handle Fed Rate Hikes
By BEN EISEN – WSJ
The yield curve, long seen as a soothsayer for the health of the economy, may be sending us a new signal: The world can’t handle a rise in U.S. interest rates, even if America can.
goo.gl/ATXhna

The Currency Ethicist: One Man’s Push to Fix a Tarnished Market
Lananh Nguyen – Bloomberg
What David Puth has seen in 35 years in the currency markets hasn’t always been pretty. Anyone curious about misbehavior among currency traders doesn’t have to go back very far to find it. Five global banks paid about $9 billion in fines and penalties last year after traders were caught working together to rig benchmarks.
goo.gl/tEzQij

A Computerized Trader Just Beat Banks in Top Currency Ranks
John Detrixhe – Bloomberg
XTX is the first electronic specialist to break into top five; Deutsche Bank was the biggest currency trader until 2014
Computerized trading firm XTX Markets Ltd. has come from nowhere to dethrone major banks including Deutsche Bank AG in the rankings of the world’s biggest spot currency traders.
goo.gl/CHR5PF

Regulatory

CFTC Issues Final Cross-Border Margin Rule
CFTC
The U.S. Commodity Futures Trading Commission (CFTC) today adopted a rule implementing a cross-border approach to the CFTC’s margin requirements for uncleared swaps (Final Rule). Published in January 2016, the CFTC’s margin rule applies to CFTC-registered swap dealers and major swap participants for which there is no Prudential Regulator (collectively, covered swap entities or CSEs). The Final Rule is closely aligned with the cross-border margin requirements already adopted by the Prudential Regulators. The Final Rule was adopted 2-1 via a seriatim vote with Commissioner J. Christopher Giancarlo dissenting.
goo.gl/vVdKMJ

Statement of Chairman Timothy Massad on the Cross-Border Application of the Margin Requirements for Uncleared Swaps
CFTC
I am pleased that today, the Commission has adopted a cross-border approach to our rule setting margin for uncleared swaps.
goo.gl/EFXM71

New York, London on Notice as China Covets Commodity Pricing
Bloomberg News
There’s ‘chance of a lifetime’ to become global center: CSRC; China plans to open up crude, iron ore and rubber markets
China has put the world’s traditional financial centers on notice that it wants to develop its raw material markets as hubs for setting prices, seeking to marry the country’s commercial heft with a much greater say in determining how much commodities cost.
goo.gl/1YzEZW

Concurring Statement of Commissioner Sharon Y. Bowen Regarding Cross-Border Margin Rule
CFTC
Margin and Capital as the Pillars of Market Safety
Margin and capital are two of the most important tools for risk mitigation for the derivatives markets. Thus it is very important that we get our rules on margin and capital right in order to accomplish the reform required under the Dodd-Frank Wall Street Reform and Consumer Protection Act.1 As many of you know, last December, I voted against the final margin for uncleared swaps rule because I did not believe that it was strong enough to fully protect our system. As I said in December, adequate margin is fundamental to market safety as it is a “critical shock absorber for the bumps and potholes of our financial markets and for the risk of contagion and spillovers.”2 I am even more confident in that view today.
goo.gl/A5xCKB

Statement of Dissent by Commissioner J. Christopher Giancarlo on the Cross-Border Application of the Margin Requirements
CFTC
I respectfully dissent from the final rule on the cross-border application of margin requirements for uncleared swaps.
goo.gl/cbxKDJ

SEC Reviewed Valeant’s Use of ‘Non-GAAP’ Financial Measures; Valeant defended practice, but has told SEC it would make changes in its disclosures
By Michael Rapoport – WSJ
The Securities and Exchange Commission reviewed Valeant Pharmaceuticals International Inc.’s use of adjusted “non-GAAP” financial measures and criticized Valeant’s disclosures at one point as “potentially misleading,” according to newly public correspondence between the SEC and the company.
goo.gl/7FD63H

Startup Employees Invoke Obscure Law to Open Up Books; Delaware law is potentially valuable tool for employees and investors who now question their shares’ worth
By ROLFE WINKLER – WSJ
For more than a year, Jay Biederman has pestered Domo Inc. for its financial statements. The former manager wants to estimate how much his tens of thousands of shares in the tech startup are worth.
goo.gl/t3OvZb

SIFMA AMG Supports Congressional Action to Address the Puerto Rico Municipal Market
SIFMA
The Asset Management Group of SIFMA (SIFMA AMG), whose members are U.S. asset management firms who serve millions of individual and institutional investors, today released the following statement from Kenneth E. Bentsen, Jr., SIFMA president and CEO, in support of H.R. 5278, the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) introduced by the House Committee on Natural Resources and sponsored by Rep. Sean Duffy (R-WI):
goo.gl/7Mz5LN

Proposed Rule Change to Amend FINRA Rule 2242 (Debt Research Analysts and Debt Research Reports)
FINRA
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to amend FINRA Rule 2242 (Debt Research Analysts and Debt Research Reports) to clarify the application of the rule in four respects: (1) the consent requirement for institutional debt research reports distributed to non-U.S. investors by non-U.S. affiliates of members; (2) the consent requirement for institutional debt research reports distributed to specified persons for informational purposes unrelated to investing in debt securities; (3) the scope of the institutional debt research report exemption when distributing third-party debt research reports to eligible institutional investors; and (4) the disclosure requirements for debt research analysts in public appearances.
goo.gl/bNXkdg

SEC Proposes Higher Net Worth Threshold for Qualified Clients under the Advisers Act
by Anthony Drenzek, Stephen Mears, Christopher Wells via JD Supra
On Wednesday, May 18, 2016, the U.S. Securities and Exchange Commission (SEC) proposed to increase the net worth threshold for qualified clients from $2 million to $2.1 million. This proposed adjustment is being made pursuant to a five-year indexing adjustment required by §205(e) of the Investment Advisers Act of 1940 (the Advisers Act), as amended by §418 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
goo.gl/IoRh2G

Exchanges & Trading Facilities

Top banks gain from discontent over hefty LME fee increases
Reuters
Core industrial clients of the London Metal Exchange (LME), unhappy with a steep rise in trading fees, are taking some of their business to top-tier investment banks and rival exchanges, industry sources said.
reut.rs/1OMWMHm

Hong Kong’s Stock Exchange Aims to Launch First Yuan Benchmark Index
WSJ
Hong Kong’s stock exchange wants to create a benchmark index for the yuan to try to spur offshore trading of the Chinese currency, which has suffered setbacks as China slowly liberalizes the flow of money in and out of the mainland.
on.wsj.com/1OMYisW

CBOE, C2 and CFE Trading Schedule for the Memorial Day Holiday
CBOE
CBOE Holdings, Inc. (NASDAQ: CBOE) today announced the following trading schedule for Chicago Board Options Exchange® (CBOE®), C2 Options Exchange (C2) and CBOE Futures Exchange (CFE®) in observance of the Memorial Day holiday:
goo.gl/L0IXDs

The Nasdaq Has Once Again Rejected a Bid for Its First Marijuana Stock
by Lucinda Shen – Fortune
This is the second time it said no.
MassRoots, a social network for cannabis users that wants to become the Nasdaq’s first marijuana stock, had its listing application rejected for the second time on Monday. The exchange first said no in August, when MassRoots lacked a bank underwriter. This time however, the exchange has a very different justification.
goo.gl/dKKmyq

Face to face with Reny Morsch
Eurex
I have been with Deutsche Börse Group for more than seventeen years. I graduated from the Frankfurt School of Finance and Management with a degree in Economics and Banking. I started my career in foreign exchange at UBS in Frankfurt in 1987 where I worked as an assistant spot trader. In 1989 I joined Manufacturers Hanover Trust as a spot USD/DEM trader and took over the role of the chief spot trader post merger with Chemical Bank in Frankfurt. In 1995 I joined ABN Amro Bank in Frankfurt where I became interim chief dealer responsible for the spot and forward desks as well as project manager for their e-commerce platform.
goo.gl/vkh1Zr

Nasdaq Announces Mid-Month Open Short Interest Positions in Nasdaq Stocks as of Settlement Date May 13, 2016
By GlobeNewswire
At the end of the settlement date of May 13, 2016, short interest in 2,306 Nasdaq Global MarketSM securities totaled 7,897,704,412 shares compared with 7,785,833,668 shares in 2,313 Global Market issues reported for the prior settlement date of April 29, 2016. The Mid-May short interest represents 4.42 days average daily Nasdaq Global Market share volume for the reporting period, compared with 4.83 days for the prior reporting period.
goo.gl/VIvRNd

Technology

Two blockchain leaders might join forces
Andrew Meola – Business Insider
Two of the biggest names in the blockchain space could become partners.
goo.gl/86VvPd

Fintech startup SigFig raises $40M to build out its robo-advisor
Bizjournals.com
Fintech startup SigFig raised $40 million in funding on Tuesday from several large banking institutions to build out its wealth management robo-advisor.
goo.gl/Me02sM

Why Hyperledger wants to be the ‘Linux of blockchain’
IT World Canada News
Blockchain technology offers many different benefits to enterprise developers — but there’s no cross-industry open standard for how to develop it. That makes it difficult for vendors and CIO customers to place their bets and begin building it into their technology architecture.
goo.gl/8OUpSS

Politics

No One Hates the IRS More Than House Republicans
By Editorial Board – Bloomberg
Pity John Koskinen, who agreed to take one of the worst jobs in America and is now being punished for it.
goo.gl/Y7pXvN

U.S. Probes Real-Estate Firm With Ties to Sen. Bob Corker; Investigators are focused on accounting questions at CBL & Associates but also are reviewing the senator’s stock trades in the REIT
By BRODY MULLINS and ARUNA VISWANATHA – WSJ
A real-estate firm that has been a favored investment of Tennessee Republican Sen. Bob Corker is under investigation by federal law-enforcement officials for alleged accounting fraud, according to people familiar with the matter.
goo.gl/GtURqt

More Than 400 Writers Sign Petition Protesting Donald Trump
By ALAN RAPPEPORT – NY Times
Donald J. Trump has been working to mend fences with many of his detractors, but among literary luminaries it is looking like it will be a tough sell.
goo.gl/oYEgqX

Hedge Funds & Managed Futures

Draghi in QE Quandary After Draining Bond Market by $800 Billion
Anooja Debnath – Bloomberg
It’s like building ‘a boat in the open sea,’ says Rabobank; Germany could face hurdle in executing QE plan: DZ Bank
The biggest buyer of European government bonds may have to start spreading its money around a bit more widely.
goo.gl/S0TFuo

Goldman Plans $1.5 Billion Fund to Take Minority Stakes in Private-Equity Firms; Firm plans to initially make its plays out of Petershill II LP, a $1.5 billion pooled investment fund
By AMY OR – WSJ
Competition for acquiring direct stakes in private-equity firms just got hotter.
goo.gl/5RzxId

Banks & Brokers

Nomura Cuts Executive Pay to 3-Year Low as Daiwa Increases
Takahiko Hyuga – Bloomberg
Compensation disclosed before June annual shareholder meetings; Nomura failed to stem losses at businesses abroad last year
Nomura Holdings Inc. cut pay for its top executives by 18 percent to the lowest level in three years after profit at Japan’s biggest brokerage slumped and losses abroad swelled.
goo.gl/2VbCwS

Citigroup Retains Currency-Trading Crown as Deutsche Bank Slides
Anooja Debnath, Andrea Wong – Bloomberg
JPMorgan is No. 2, UBS is No. 3 in Euromoney magazine survey; Trading volume falls 23 percent as big banks lose market share
Citigroup Inc. is the world’s largest currency trader by market share, according to a Euromoney Institutional Investor Plc survey, the third straight year the New York-based bank has led the rankings.
goo.gl/vUzWye

Deutsche Bank Trading Woes Exposed in Slide Down Currency League
Rachel Evans, Andrea Wong – Bloomberg
After topping Euromoney ranking for 9 years, lender slips to 4; Bank’s market share shrinks to 7.9%, from 14.5% a year earlier
A tough week for Deutsche Bank AG just got worse.
goo.gl/2eNlrY

Banks Said to Devise Plans for Cutting Back Online Lending Risk
Matt Scully – Bloomberg
Wall Street firms said to look at investors’ credit lines; So far, banks haven’t scaled back lending to loan buyers
Some of Wall Street’s biggest banks are making contingency plans to cut their exposure to online consumer loans if the market deteriorates further after the recent crisis at LendingClub Corp., people with knowledge of the reviews said.
goo.gl/XCQ255

Barclays Former Asia-Pacific Manager Pratt Sues Bank Over Pay
Benjamin Robertson, Cathy Kit Ching Chan – Bloomberg
Details of Jon Pratt’s claim in H.K. labor tribunal filing; Pratt reported in January to have exited amid global job cuts
Barclays Plc’s Asia unit is being sued for HK$18.9 million ($2.4 million) by former Asia Pacific Global Finance Chairman Jon Pratt, money he alleges he was owed when he exited the firm, according to his claim filed in Hong Kong’s labor tribunal in March.

Clearing & Settlement

Clearing Members Analyze the Resolution of Central Counterparties in New White Paper; TCH and ISDA provide perspectives to support FSB’s CCP resolution planning efforts
ISDA
As central counterparties (CCPs) continue to play an increasingly important role in the global financial system, The Clearing House and the International Swaps and Derivatives Association (ISDA) today issued a white paper identifying key issues that regulators should consider as they develop a comprehensive resolution framework for systemically important CCPs.
goo.gl/PbZkpn

LCH adds equities clearing on SIGMA X MTF
LeapRate
With the addition of SIGMA X MTF, LCH’s EquityClear service will offer clearing across 17 active interoperable European equities trading venues.
/goo.gl/UbKyu7

Credit Suisse latest to sign for FIS clearing utility
Futures & Options World
Credit Suisse is the latest investment bank to sign up to use the derivatives outsourcing service launched last year by Sungard and now owned by US tech provider Fidelity National Information Services (FIS). Under the terms of the deal the bank will migrate its post-trade futures and cleared over-the-counter (OTC) derivatives operations and technology to the utility, now called the FIS Derivatives Utility.
goo.gl/vY1Tc2

Indexes & Products

Following Strong First Quarter The Nasdaq Stock Market® Secures 18 New ETP Listings and Switches in April
By GlobeNewswire
Nasdaq (Nasdaq:NDAQ), the single largest U.S. equity exchange by market share, announced six new exchange-traded product (ETP) listings and 12 switches in April, growing Nasdaq’s total ETP listings to 259. The 18 new ETP listings include 12 First Trust ETP and Index switches of the AlphaDEX family representing approximately $6 billion in assets under management.
goo.gl/SF7i27

MSCI’s China A-share decision hangs in the balance
FT
There is an even chance that, this summer, China’s A-shares will be included for the first time in a key emerging market investment index operated by MSCI, the index provider. If it happens, it will be a welcome development, for the simple reason that it will make the benchmark a more accurate reflection of the emerging market corporate universe.
on.ft.com/1OMXrs9

Amundi launches two smart beta European equity ETFs
ETF Strategy
French exchange-traded fund provider Amundi ETF has launched two new smart beta European equity ETFs on Euronext Paris targeting momentum and quality factor exposures. The ETFs are designed to help investors perform their asset allocation choices and are cheaper than existing ETFs on the same underlying.
bit.ly/1OMYdFB

Inflation or Why Raise Interest Rates
Indexology – S&P Dow Jones Indices
The minutes of the Fed’s April 26-7 meeting convinced almost everyone that the Fed will raise interest rates at its next meeting in June, but left them wondering why. Most of the subsequent discussion centered on the labor market and how close the economy is to full employment. There was also some whispering about inflation.
goo.gl/EXXV12

Enforcement

SEC Prevents Trader’s Profits From False Filing
SEC.gov
The Securities and Exchange Commission has obtained a court order to freeze the profits of a trader who allegedly manipulated a technology stock through a false regulatory filing traced to a computer in Pakistan.
The asset freeze issued today in federal court in Manhattan ensures that Nauman A. Aly of Pakistan cannot withdraw from his U.S.-based account the $425,000 in options trading profits made in less than 30 minutes last month after the false filing. The filing stated that Aly and six Chinese investors had collectively acquired 5.1 percent of Silicon Valley-based Integrated Device Technology (IDT). According to the SEC’s complaint, his false statements caused the company’s stock to spike more than 25 percent within minutes.
1.usa.gov/1TUZDQ8

Final trade netted pair $200,000, court told
Leo Shanahan – The Australian
The final trade in the account at the centre of Oliver Curtis’s ­insider trading trial allegedly netted Mr Curtis and former best friend John Hartman $200,000 through short selling in US miner Boart Longyear.
goo.gl/qhHofM

Illegal practice as a securities adviser – Another fine against Kader Hanahem
AMF
On March 21, 2016, Judge Paul Dunnigan of the Court of Québec, district of Saint-François, approved a joint proposal made by the parties and ordered Kader Hanahem to pay a total fine of $350,000 in connection with illegal activities as a securities adviser.
goo.gl/0E9PE4

Ruchi Soya, National Seed barred from securities market; The order was passed in a case related to violation and manipulating as well as fraudulent dealings in castor seed derivatives in January on NCDEX
Business Standard
The Securities and Exchange Board of India (Sebi) on Tuesday barred commodity-market players Ruchi Soya Industries and National Steel and Agro Industries from dealing in the securities market.
goo.gl/VSW7dw

Environmental & Energy

Exxon, Chevron Oppose Environmental Drive to Cut Big Oil’s Reach
Joe Carroll, Dan Murtaugh – Bloomberg
Shareholders will vote on limiting oil and gas exploration; Money saved would be paid to investors in dividends, buybacks
Climate activists seeking to pull investors into their camp are pushing Exxon Mobil Corp. and Chevron Corp. to limit money spent on exploration in favor of higher dividends and more share buybacks.
goo.gl/P1brk2

Asia-Pacific

Peak Sport latest to consider leaving Hong Kong stock exchange amid low trading volumes
South China Morning Post
Peak Sport Products, one of China’s largest sports goods manufacturers, said it may delist from the Hong Kong bourse. In a filing to the Hong Kong stock exchange Tuesday night, Peak said its controlling shareholder is “in the preliminary phase of considering proposing a scheme of arrangements with respect to the ordinary shares of the company, subject to such a scheme which, if proceeded with, could result in the privatisation and delisting of the company from the stock exchange.”
goo.gl/vJqoYR

Japan told G7 finance ministers it will raise sales tax: Aso
Reuters
Japanese Finance Minister Taro Aso said on Wednesday he told his G7 counterparts at a finance leaders’ meeting last week that his country will proceed with a scheduled sales tax hike next year. But he sidestepped a question in parliament from an opposition lawmaker on whether that meant Japan has officially pledged to the international community that it will go ahead with the controversial tax hike.
reut.rs/1OMYmJ7

Five major banks in Singapore now work with Apple Pay, Singapore News & Top Stories
The Straits Times
Five major banks in Singapore have signed up to the Apple Pay e-wallet system, allowing credit and debit card users here to tap and pay with their mobile devices from today. Together, the five banks – POSB, DBS Bank, OCBC Bank, United Overseas Bank (UOB) and Standard Chartered Bank – account for more than 80 per cent of the Visa and MasterCard credit and debit cards issued in Singapore.
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Frontier Markets

Russia, China add more gold reserves; Venezuela sells more
Reuters
China and Russia, two of the largest holders of bullion, and Kazakhstan bolstered their gold reserves last month, while Venezuela sold off more of its bullion earlier this year, data from the International Monetary Fund showed on Tuesday.
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MFs increase exposure in bank stocks on cheaper valuation; Fund managers had trimmed allocation to banking stocks between November and January, lowering exposure by over Rs 9,000 crore during the period due to higher bad loans
Business Standard
Mutual funds have raised allocation for banking stocks to Rs 85,330 crore in April, primarily on account of cheaper valuations.
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Pakistan closes in on MSCI upgrade
FT.com
For a country so used to bad news, Pakistan has in many respects fared reasonably well in recent years. Terrorism-related deaths have fallen 74 per cent from their 2010 peak, economic growth has accelerated to a solid 4.5 per cent, inflation has fallen sharply to around 3.3 per cent and the fiscal deficit has narrowed markedly to around 4.1 per cent of gross domestic product.
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Miscellaneous

Telegraph to axe senior jobs in fresh round of cuts; Media group blames wider cost-cutting exercise on downturn in print advertising
by: Daniel Thomas – FT
The Telegraph Media Group is cutting more jobs among its journalists amid a wider cost cutting exercise blamed on the downturn in print advertising.
/goo.gl/Lf0FYW

Can BuzzFeed News survive the shift to video?
by Dylan Byers, @CNNMoney
Take a tour of BuzzFeed’s viral laboratory
Early last year, BuzzFeed CEO Jonah Peretti wrote a blog post titled “Why BuzzFeed Does News,” a battle cry for journalism that had the unintended effect of unnerving some members of the news division.
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