First Read

Pressure builds to move more FX trading onto exchanges
By Patrick Graham and Jamie McGeever, Reuters
International regulators struggling to rein in the $5 trillion-a-day global foreign exchange market are finally finding some support from asset managers warming to the idea of moving more trading onto exchanges.
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***** Never underestimate the power of a Ray McKenzie opinion piece in the John Lothian Newsletter.

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Coffee Consumption Expected to Jump; The projection comes as global coffee supplies have been squeezed by Brazil’s drought
By Nicholas Bariyo, WSJ
The world is drinking more coffee, with demand likely to rise almost 25% in the next five years, according to the International Coffee Organization.
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***** I am going to go down to Starbucks and ponder this for awhile.

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Thomson Reuters Launches New BoardLink iPhone Application for Directors on the Go
Thomson Reuters
New app gives boards of directors access to critical company and business intelligence information through a secure mobile-based solution
Thomson Reuters, the world’s leading source of intelligent information for businesses and professionals, today announced the launch of a new mobile iPhone application for its BoardLink service, a secure board workflow solution designed to further accommodate companies as they operate across borders and have increasingly mobile, global boards.
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***** This will work well as the board directors ponder the companies direction while sitting at Starbucks.

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Mary Ryan, TD Ameritrade – TD Ameritrade U: Who, What, When, Where, Why & How
JohnLothianNews.com

“By increasing the financial literacy in a risk-free environment, we can decrease the age of the average investor…which is going to bring more traders and investors to the marketplace.”

Mary Ryan of TD Ameritrade explains the TD Ameritrade U program, which serves to educate students on trading and the financial industry. Ryan discusses the types of tools used in the program, such as giving students access to actual trading platforms, market data and trading support. The goal is to give students the most accurate simulation so they can go out and begin trading in the real world. Ryan also explains the the thinkorswim Challenge, a contest where student teams make trades with a $500k portfolio for four weeks. Prizes are awarded to the students with the highest returns.
Watch the video »
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SocGen Prime Services acquires minority stake in Gmex Group
Finextra
Societe Generale Prime Services – formerly Newedge – today announced that it has acquired a minority stake in Global Markets Exchange Group International LLP (“GMEX Group”). Following the investment by Deutsche Börse Group AG, Societe Generale becomes the second minority investor in GMEX Group and plans to provide execution and clearing services for clients trading on the exchange.
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***DA: Mr. Misra is making waves. Click here to see his talk from last fall’s MarketsWiki Education event in London.

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Rosenthal Collins Group Named Best Boutique FCM by CTA Intelligence Magazine
RCG
Rosenthal Collins Group LLC (RCG), a leading independent futures clearing firm, today announced that CTA Intelligence magazine this month named RCG “Best Boutique” Futures Commission Merchant (FCM) in its U.S. CTA Intelligence Services Awards 2015. The awards recognize and honor firms that have provided “outstanding support and services to the North American managed futures industry” and “demonstrated exceptional customer service” over the past 12 months.
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***** RCG is a “Boutique” FCM? No wonder Scott Gordon‘s hair looks so nice.

***** Congratulations to RCG, our latest MarketsWiki Partner level sponsor.

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The La Salle Street Tax fairy tale
Sun-Times Editorial Board
Like Tinkerbells with pixie dust, dozens of candidates for alderman keep trying to spread a complete fantasy: a “La Salle Street tax” would solve all or much of Chicago’s massive financial problems. Don’t believe it. Chicago needs solutions, not fairy tales. A large financial transaction tax almost certainly would backfire and decimate Chicago’s financial markets, draining rather than growing Chicago’s tax base. And a more responsibly measured LaSalle Street tax would generate only a modest sum for our hard-pressed city and state.
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***** “The proposal du jour calls for a $1 to $2 fee on each futures, futures options and stock index options contract traded on the Chicago Mercantile Exchange and the Chicago Board Options Exchange.”

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Drone Rules Cheered, but Not by All; Some proponents say restrictions would preclude many commercial uses
By Jack Nicas and Andy Pasztor
Long-awaited federal rules proposed for commercial drones should pave the way for thousands of U.S. businesses to fly the devices in industries like filmmaking, farming and construction, but drone proponents worried that limits in the regulations would stifle other possible uses like package delivery.
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***** If the drone rules are passed, John Lothian News will be covering the Boca golf outing with a fleet of drones. You can sponsor a drone and we will erase the video of when you kick the ball back into the fairway.

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MarketsWiki

MarketsWiki Page of the Day
Harvey Goldschmid

MarketsWiki Recent Updates

People

Blair Hull; Harvey Goldschmid; Ivers W. Riley; Candice Adam; Adrian Bell; Adam Toms; Hannah Sloane; Adam Kansler; Eberhard Scherkus; Werner Vogt; John Rogers; Jodi Kawada; Thomas Lant; John Parry

Miscellaneous

Sarbanes-Oxley Act of 2002

Statistics

58,718,194 pages viewed, 8,152 articles, 189,597 edits
MarketsWiki Statistics

Lead Stories

CFTC to propose swaps anonymity; Planned action would be a setback for banks, but a victory for hedge funds and high-speed traders
By Katy Burne, WSJ
U.S. regulators are poised to introduce measures that would ensure anonymity for traders in the $700 trillion market for swaps, said people familiar with the discussions, a flip-flop that would hand a victory to hedge funds and speedy trading firms while dealing a blow to banks.
jlne.ws/1DBD4va

Clearing brokers to raise fee structure for buy-side, says Catalyst
The Trade News
As regulatory change continues to take hold of banks’ profits, clearing fee structures for buy-side firms are estimated to increase this year to deliver 14-15% return on capital, up from the current 1-2%, argues consultancy firm Catalyst. Incoming rules such as central clearing for OTC derivatives in Europe and leverage ratios set out in Basel III has placed higher emphasis on profitability and relationships with clients.
jlne.ws/1JneYZX

Toronto Stock Exchange warns on retail flow to US markets
Anna Nicolaou in New York, FT
The new head of Canada’s largest stock market has warned that the US practice of stockbrokers paying for order flow is “a major issue” for Canada and called for greater freedom to let local market participants compete.
jlne.ws/1MtE8Fx

Nasdaq mulls European equities derivatives expansion
By Anna Irrera, Financial News
Global exchange giant Nasdaq is thinking about expanding its equities derivatives franchise across Europe, following the success of its Dutch equities options platform, The Order Machine.
jlne.ws/1FWEHmF

Effectiveness of LSE opening auction questioned
Philip Stafford, FT
The opening auction for FTSE 350 stocks on the London Stock Exchange regularly fails to set prices for more than 80 per cent of the index, throwing into question its use, a new academic paper has argued.
jlne.ws/1BiXklV

Comment: Risk incentives critical in clearing recovery plans
Thomas Book, FT
During the financial crisis, public support for the financial industry was administered on enormous scale for a clear reason — the external costs of major firms’ failures were presumed to be too extreme.
jlne.ws/1MtL8Ca

***** Thomas Book is the CEO of Eurex Clearing.

Schneiderman Gets NY Supreme Court Greenlight on Barclays Lawsuit
By Faye Kilburn, Waterstechnology.com
The New York State Supreme Court has rejected efforts by Barclays to dismiss a lawsuit filed by New York Attorney General Eric Schneiderman accusing the bank of fraud relating to high frequency trading practices on its dark pool.
jlne.ws/17MeXhG

Oil traders celebrate market rout
Neil Hume, Commodities Editor, FT
For some the lavish party thrown by Socar, the state oil company of Azerbaijan, during International Petroleum Week, was a chance to drown their sorrows and forget about the market.
jlne.ws/19rvXu2

All Bankers Not Remunerated Equal
by Paul J. Davies, WSJ
Income inequality is either a great economic sickness, or the politics of envy depending, perhaps, on your salary.
jlne.ws/1vaIPP0

Australia’s tycoons suffer commodities hangover
Jamie Smyth in Sydney, FT
The commodities slump has dented economies, capital expenditure and profits. Now it is scything the wealth of some of Australia’s most colourful tycoons.
jlne.ws/1zkB714

How central banks have lost control of the world; From engaging in ‘competitive easing’ to provoking international currency wars, have we finally reached the limit of what monetary policy can achieve? Click on the countries below
By Mehreen Khan
The world’s oldest central bank has ventured into uncharted territory. Last week, Sweden’s Riksbank slashed its main policy rate into negative territory.
jlne.ws/1zkOtuh

Regulatory

ASIC consults on collective action by investors
ASIC
ASIC is reviewing its regulatory guidance for investors who want to take collective action to improve the corporate governance of listed entities.
ASIC Commissioner John Price said, ‘Effective investor engagement underpins good corporate governance and promotes confident and informed investors and fair, orderly and transparent markets. ASIC recognises that it can be efficient and effective for the market for investors to work together when engaging with a listed entity.
jlne.ws/1AhyEXO

FMC merger with Sebi in phases
Business Standard News
The government plans to merge commodity market regulator Forward Markets Commission (FMC) with capital markets regulator Securities and Exchange Board of India (Sebi).
jlne.ws/1JnfmrF

Self-Regulatory Organization (SRO) Rulemaking and National Market System (NMS) Plans
SEC

  • NSX: Order Granting Approval of Proposed Rule Change in Connection with a Proposed Transaction in Which National Stock Exchange Holdings, Inc. Will Acquire Ownership of the Exchange from the CBOE Stock Exchange, LLC (Release No. 34-74270; File No. SR-NSX-2014-017; February 13, 2015)

 

  • OCC: Order Approving Proposed Rule Change Concerning Extended and Overnight Trading Sessions (Release No. 34-74268; File No. SR-OCC-2014-24; February 12, 2015)

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Hat in Hand for Budget; OCR; Overcharges; Swaps Clearing and Execution – Bridging the Week: February 9 to 13 and 16, 2015
The National Law Review
CFTC Chairman Calls for Increased Funding and Discusses Priorities During Congressional Testimony
jlne.ws/1MtFzDM

U.S. Regulators Revive Work on Incentive-Pay Rules; Compensation That Rewards Excessive Risk Taking Is a Concern, WSJ
By Victoria McGrane And Andrew Ackerman
U.S. financial regulators are focusing renewed attention on Wall Street pay and are designing rules to curb compensation packages that could encourage excessive risk taking.
jlne.ws/1A2mBPm

Exchanges & Trading Facilities

Eurex launches new single stock dividend futures contracts
Hedgeweek
Since 26 January, 17 new single stock dividend futures based on German, French, Dutch and Italian companies have been available. Additionally, 14 new contracts based on British and Swiss stocks have been tradable since 2 February. The majority of the companies are mid-cap firms operating in 11 countries with a track record of sizeable dividend payments, which can be hedged with listed derivatives contracts including central clearing. The latest extension increases the total number of single stock dividend contracts at Eurex to 143.
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LME warehousing; overdue reform or regulatory over-reach?
Andy Home – Yahoo Finance UK
What to make of last week’s mass cancellations of zinc at London Metal Exchange (LME) warehouses in New Orleans? A similar round of heavy cancellations in late December created a “flash” load-out queue for zinc at New Orleans. Even after 53,375 tonnes of draws over the course of January, the queue still stretched to 48 days at the end of the month.
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Johannesburg Exchange Signs Euronext Deal to List Wheat Contract, Share Market Data
by Faye Kilburn, Waterstechnology.com
Deal will help Euronext Grow Wheat Contract as a global benchmark European exchange group Euronext has signed a license agreement with the Johannesburg Stock Exchange (JSE) that will enable JSE to list its flagship Milling Wheat contract, and allow each exchange to use settlement prices and market data for the other’s commodities contracts.
jlne.ws/17MeFHI

“Technical issues” delay Eurex opening
TheTradeNews.com
German derivatives platform Eurex experienced technical issues on its T7 trading system this morning leading to a delay in opening its futures and options markets.
jlne.ws/1JnaX84

Xetra launch for MAP Balanced 7 SF UCITS ETF (EUR) issued by UBS
Deutsche Borese Group
ETF provides access to UBS’s multi asset portfolio strategy with euro currency hedge
Xetra/Börse Frankfurt: A new unit class of the sub-fund MAP Balanced 7 SF UCITS ETF issued by UBS has been tradable in Deutsche Börse’s XTF segment on Xetra since Tuesday.
jlne.ws/19rtik9

Deutsche Boerse revenue growth of 13% predicted from Q4 | news | Trading & Execution | Algorithmic Trading | thetradenews.com
TheTradeNews.com
Heightened market volatility in the fourth quarter of 2014, is expected to have lifted revenues at exchange operator Deutsche Boerse by around 13%, when it reports its Q4 results tomorrow.
jlne.ws/1JnaDWN

NZX Full Year 2014 Results Announcement
NZX today reported its full year results for the year ended 31 December 2014. Revenues for the year of $65.2 million were up 3.8% on 2013, driven by strong growth in NZX’s capital markets and funds management businesses.
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Hedge Funds & Managed Futures

New Zealand dollar at record against Aussie rival
Neil Dennis, FT
The New Zealand dollar reached a record versus its Australian counterpart, responding to better than expected retail sales data and an expanding services sector.
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Banking Heir Who Lost Millions in Gold Wants to Raise More
by Thomas Biesheuvel, Bloomberg
Peter Hambro, descended from a wealthy line of Anglo-Danish bankers, recalls receiving a bottle of whisky as a gift from his mother’s gardener. It was a token of thanks after seeing a good return on his investment in Hambro’s Russian gold mining business. “I’ve made so much money, the least I can do is give you a drink,” Hambro, 70, remembers the gardener saying at the time.
Those days are long gone.
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Banks & Brokers

Macquarie says trading conditions continue to improve
By Robb M. Stewart, The Wall Street Journal
Macquarie Group said trading conditions across the investment bank’s operations have continued to improve, setting it up for profit to grow at the top end of a 10% to 20% range for the financial year.
jlne.ws/19rubt8

Standard Chartered’s Stock Rating Cut as Capital Concerns Mount
by Stephen Morris, Bloomberg
Standard Chartered Plc, whose shares fell 29 percent last year, was downgraded by analysts at Investec Plc on concerns the bank will have to raise capital and amid a possible change in management.
jlne.ws/1FWQ2Di

Clearing & Settlement

Clearing brokers to raise fee structure for buy-side, says Catalyst
TheTradeNews.com
As regulatory change continues to take hold of banks’ profits, clearing fee structures for buy-side firms are estimated to increase this year to deliver 14-15% return on capital, up from the current 1-2%, argues consultancy firm Catalyst.
jlne.ws/1JnbI0T

BSEC gives priority to clearing corporation, venture financing
Financial Express (Bangladesh)
A committee of the securities regulator has recommended formation of a Clearing Corporation like a demutualised organisation, having majority number of independent directors in its board for the sake of ensuring transparency and accountability, officials said.
jlne.ws/1Jnd1g9

Indexes & Products

New MSCI hire eyeing SMSFs
SMSF Adviser
MSCI’s vice president for ETF client coverage in Australia will be keeping SMSFs in his sights in his new role. MSCI hired Tim Bradbury to the position early this week, and he will be responsible for driving visibility, awareness and usage of the MSCI indexes within the ETF market in Australia, with a special focus on retail distribution networks and SMSFs.
jlne.ws/1CDRxoP

MSCI index shake-up challenges China managers
Zacks
China fund managers are preparing for ‘controversial’ changes to the benchmark index, which could also prompt adjustments to Investment Association definitions.
jlne.ws/1CDRFEM

VALX: A New Guru ETF That Mimics The All-Time Greats
Smarter Analyst
When it comes to investing, originality is overrated. You get no brownie points for using only your own research. Returns are returns. So, if you can piggyback on the research of famous investors like Warren Buffett or Peter Lynch, why wouldn’t you?
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Inside Money: ETFs – greatest ever innovation or looming disaster for investors? – Your Money – NZ Herald News
I thought it was loom bands but legendary investor, Jack (aka John) Bogle has named exchange-traded funds (ETFs) as “the greatest marketing innovation of the 21st century”. But as Bogle, the godfather of passive investing, told the Financial Times (FT), he doesn’t mean that in a good way.
jlne.ws/1CDSrl9

MSCI index shake-up challenges China managers
Investment Week
China fund managers are preparing for ‘controversial’ changes to the benchmark index, which could also prompt adjustments to Investment Association definitions.
jlne.ws/1CDRFEM

Technology

Legal-Services Firm’s $73 Million Deal Strips The Mystery From Derivatives Trading
By Daniel Fisher, Forbes
The global financial crisis was partly a massive back-office failure. As the mortgage market imploded, investors, regulators and even bank executives struggled to understand what their exposures were in a multitrillion-dollar international web of swaps, derivatives and other securities that were memorialized in contracts that were understood, if at all, only by the people who negotiated them.
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Fidessa Group PLC Preliminary Results
Fidessa
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Investment in Fintech: Specific Classification Needed for Financial Companies to Invest in Fintech Firms
BusinessKorea
Financial companies’ investments in fintech companies will be allowed starting next month. Still, the issue of the classification of fintech companies remains to be handled. In fact, this type of investment has already been allowed, according to the relevant law. However, the lack of related cases and the ambiguity of the classification have acted as hurdles. Under the circumstances, the Financial Services Commission will clarify the boundary by the end of next month. The e-Finance, financial data analysis, and financial software development businesses are expected to be included in the category.
jlne.ws/1CDSUnB

Cybercrime moves from server room to the boardroom
TheTally – comment and analysis from Financial News
Cybersecurity analysts have for years lamented that banks weren’t paying sufficient attention to the threat posed by online attacks. Now, after a slew of high-profile breaches, it seems bank chief executives are taking note.
jlne.ws/1JncOtl

Incubator and accelerator update: Mobile, financial services, healthcare
BetaBoston
Three updates from the world of incubators and accelerators that offer a boost to fledgling businesses
jlne.ws/1CDSLR2

Fintech challenges equity research model
Financial News
When Tom Beevers was working as a fund manager at London-based Newton Investment Management in 2012, he started to notice a growing amount of equity research appearing online. In some cases, he says, the views on stocks from independent analysts on popular websites such as Seeking Alpha were “even better than the research I was receiving from the banks”.
jlne.ws/1JndKOo

Enforcement

France issues arrest warrants for ex-UBS managers – judicial source
Reuters
French investigating magistrates have issued arrest warrants for three former Swiss managers at UBS in connection with their investigation into whether the bank helped tax dodgers, a judicial source told Reuters on Tuesday.
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Environmental & Energy

EU policy mash dents carbon markets before Paris climate deal
By Mathew Carr – The sydney Morning Herald
The European Union’s carbon market, designed to save the environment, is being undercut by a patchwork of national subsidies for renewables and misaligned energy policies that have helped cut in half the volume of power being traded.
jlne.ws/1yR9RpV

Commodities explained: Oil data watch
Anjli Raval, FT
Concerns about a growing oil supply surplus last year prompted Saudi Arabia, the world’s largest exporter, in November to persuade fellow Opec members that cutting production to support oil prices was not in their interest. The Kingdom said a period of lower prices would shave off some US shale production and other high-cost output and protect Saudi Arabia’s (and in theory the cartel’s) market share.
jlne.ws/1vBH4W0

Opinion: Planet Earth is the Titanic, climate change the iceberg
by Paul B. Farrell, MarketWatch
Yes, the world is sinking. And the band keeps playing: On the Titanic, first violinist, Big Oil’s Koch Empire. For them capitalism is the solution to everything. Second chair, world’s moral authority, Pope Francis warning that capitalism is the “root cause of the world’s problems.” No harmony. And playing a mean solo flute, Mother Nature, she doesn’t care what the Kochs do, nor what Francis says.
jlne.ws/1ANcLS0

Surprisingly, a Voluntary Climate Treaty Could Actually Work
By Michael Greenstone – The New York Times
Negotiators around the world are deliberating proposals for an international climate change treaty that will contain a glaring loophole: It won’t be binding.
jlne.ws/1Mtc8BU

Ontario Inches Towards Carbon Pricing, Explores Ag And Forestry Offsets
By Gloria Gonzalez – Ecosystem Marketplace
Ontario officials have been hinting for weeks that they would be putting forth an ambitious climate plan that will include a carbon pricing program.
jlne.ws/1AhA5FJ

Asia-Pacific

Concerns raised as China steel enters ‘peak zone’
Henry Sanderson, FT
Zhang Guangning, who was elected chairman of the China Iron & Steel Association last month, did not mince his words when he gave his first speech. As China’s economy enters a “new normal”, the steel industry faces unprecedented challenges, said Mr Zhang, a life-long steel man who started his career working at an iron and steel factory in 1971. “China’s steel production has already hit a peak, or to put it another way, it has hit a turning point.”
jlne.ws/1vaGraO

Chinese Firms Tiptoe Back Into Europe’s Battered Financial Sector; Smaller financial companies emerge as target for Chinese firms looking to diversify, take advantage of cheap prices
By Max Colchester and Shayndi Raice, WSJ
Chinese investors, who got burned investing in big European banks during the financial crisis, are refocusing on a new target: small, struggling finance companies.
jlne.ws/1BiTsBg

Frontier Markets

Securities and Exchange Board of India Notices
Certificate No 420 of 2014- Order Releasing Bank and Demat Accounts of M/s Flare Finance (India) Ltd.
Adjudication Order against 58 entities in the matter of Wellpack Papers & Containers Limited
In the matter of Rakan Steels Limited
Misc. Application No. 25 of 2015 And Appeal No. 59 of 2015
PR – Order in the matter of M/s ATM Agro Industries India Limited
Quantum Dynamic Bond Fund
Adjudication Order in the matter of Hotline Teletubes & Components Ltd
Private placement data of corporate bonds -New
Data on transfers in Corporate Bonds at Depositories
jlne.ws/12kCz9E

China’s weather service blames inaccuracy on Russian ruble
MarketWatch
In an unusual move, China’s national weather service is warning that its forecasting may lose some precision due to Russia’s economic problems, including a depreciation in the ruble.
“Our weather forecasts might be less accurate due to the recent fall in Russian ruble,” China’s National Meteorological Center (NMC) said on its official Weibo microblogging account late last week. The NMC explained that it relies on Russian meteorologists to provide data that “serve as a reference” for its own prognostications, as weather from China’s northern neighbor has a big impact on what happens in China.
jlne.ws/17Mm5e2

China’s Churning Out Billionaires Like It’s 1999
by Sterling WongJill MaoZijing Wu, Bloomberg
China’s world-best stock market rally made January the busiest month for IPOs in a year. It also created a bundle of new billionaires.
jlne.ws/1FWOQj8

Miscellaneous

‘Marketplace’ Section Renamed ‘Business & Tech.’
WSJ
New name for WSJ’s B-section reflects how technology affects all businesses
Every business is a technology business. Whether it’s taxi cabs or taco delivery, today’s enterprises are urgently figuring out ways to manage the growth of information technology and to turn its disruptive potential to their advantage.
jlne.ws/1Dlqy4j

Scott Walker Is King of Kochworld
Julie Bykowicz, Bloomberg
The Wisconsin governor’s strong ties to Koch activists and donors could prove lucrative if he runs for president. On a sunny Saturday in September 2009, with Wisconsin in the throes of tea party fervor, conservative starlet Michelle Malkin fired up a crowd of thousands at a lakefront park in Milwaukee with rhetoric about White House czars and union thugs and the “culture of dependency that they have rammed down our throats.”
jlne.ws/1vBJgwA

Chocolate’s Evolution to Luxury Status Cuts Cocoa Demand
by Luzi Ann JavierMarvin Perez, Bloomberg
The world’s chocolate frenzy is finally starting to ease. A dimming global economic outlook means that consumers are looking for ways to cut spending, and cocoa demand in 2015 will grow at the weakest pace in six years, Rabobank International predicts. At stake is the $114 billion that Euromonitor Plc estimates will be spent globally on the sweet treat this year.
jlne.ws/1AhDl3S

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