First Read

TAC Committee Meeting Part 2: Reg AT Putting Trading Firms at “Precarious, Unwarranted and Unnecessary Risk”
Sarah Rudolph, JLN

At the top of the list at the CFTC’s Technology Advisory Committee meeting on Tuesday was a discussion of the CFTC Proposed Rule: Regulation Automated Trading (Reg AT).

The most contentious aspect of the discussion was whether or not the CFTC should be allowed to look at firms’ computer code for their automated trading systems. The CFTC seems convinced this is necessary and the automated traders seem equally convinced that it is a terrible thing to do.

Access to firm’s proprietary codes would help the CFTC determine whether there was intent in cases of market manipulation, which can be difficult to prove with an algorithm. But firms consider their algorithmic codes their trade secrets.

Richard Gorelick, co-founder and CEO of RGM Advisors, said requiring registrants to hold their proprietary source code in data repositories for the CFTC would violate standards of due process, a concern raised by a number of industry participants. One comment letter submitted by the Modern Markets Initiative said the rule would “place the trade secrets and intellectual property of algorithmic trading firms at precarious, unwarranted and unnecessary risk.”

CFTC Chairman Timothy Massad, however, said the step may be necessary to preserve the integrity of the markets.

Read the rest of the report at HERE
***DA: Also see Part One of Jeff and Sarah’s TAC Report, CFTC Tackles the What Ifs of Blockchain


Merged LSE and Deutsche Börse would be led by Germany’s Kengeter
The European trading giant planned by Deutsche Börse and the London Stock Exchange Group will be based in London but headed by the German group’s chief executive, according to people close to the two sides.

***DA: A merger of equals, but some are more equal than others.


John Lothian News Special Report: LSE and Deutsche Börse Dating Again
Jim Kharouf and Doug Ashburn, JLN
Well, here we go again. The on again, off again affair between the London Stock Exchange and Deutsche Börse is, well on again. The two exchanges are looking to create “an exchange of equals” which would pair two powerful securities, derivatives, clearing, products and services companies in the global exchange space.
LSE made a run at Deutsche Börse, just prior to the DB’s IPO in February 2001 but the deal fell through when shareholders in London objected. The second deal proposal between the two in 2004 ended with more shareholder disdain. And now here we are in 2016 with another run at it with two different CEOs at their respective controls – Xavier Rolet of the LSE and relative Deutsche Börse newbie Carsten Kengeter, who started in June 2015.
Meanwhile, Britons head to the polls in a few months to determine whether or not to remain in the European Union. Is the exchange tie-up a bargaining chip, the hedge of a bet, or a strange coincidence?


OCC Commends D.C. Circuit Court Ruling Regarding Capital Plan
Business Wire
OCC, the world’s largest equity derivatives clearing organization, applauded the order by the U.S. Court of Appeals for the D.C. Circuit yesterday denying a motion intended to restrict OCC from continuing to implement its capital plan. The U.S. Court of Appeals ruling represents the latest in a series of decisions in favor of OCC’s capital plan and against Susquehanna International Group, LLP, KCG Holdings, Inc., BATS Global Markets, Inc., BOX Options Exchange LLC, and Miami International Securities Exchange, LLC

***DA: Does this ruling put the issue to bed once and for all? Will it create a two-tiered structure to our options market that favors CBOE, NYSE, Nasdaq and ISE? I am guessing we have not heard the last of it.


The Stock Market Rout Can’t Breach the U.S. Consumer Firewall
Bloomberg Business
As the dot-com bubble burst, then-Federal Reserve Chairman Alan Greenspan said the last firewall between the U.S. economy and a recession is consumer confidence. Given the market’s plunge this year, will it hold now? So far, so good.

***DA: Rout? It is barely a correction at this point. Besides, there still appears to be faith that our central bankers have more tricks up their sleeves to keep the party going.


Oil Rout Leaves Billionaire Shipping Magnate With Other Fish to Fry
Bloomberg Business
When the price of a 10-pound (4.5-kilogram) Atlantic salmon jumped above the cost of a barrel of crude last month, nobody in the oil industry was celebrating. For John Fredriksen, who built a fortune on oil tankers and offshore drilling, it did at least provide some consolation.

***DA: In lieu of bonuses, BP will be giving out fishing poles and tackle boxes this year.


Yesterday’s Top Three
The top clicked story in yesterday’s newsletter was A radical world for FCMs, The Trade News’ look at the need for innovation in the incredible shrinking FCM pool. Coming in second was Financial News’ story about another skyscraper being considered in England. Not a gherkin, shard or walkie talkie; not a habitable building, and not even in London. This would be a 1,000 foot tower built to carry high speed trade data for Jump Trading and KCG Holdings. Rounding out the top three was CFTC Tackles the What Ifs of Blockchain by our own Jeff Bergstrom and Sarah Rudolph. Part two, Reg AT, appears today.

Event Spotlight

The Executives’ Club of Chicago invites you to a Chicago CEO Breakfast event
“Future of the Futures Industry: Risk Management for the Next 150 Years”

On March 8, hear CME Group’s CEO, Phupinder Gill, reflect on what will drive this important global industry based in Chicago into the future, including new efforts to fuel the city’s burgeoning FinTech community.
Registration and Networking: 7:15 a.m.
Breakfast Program: 8:00 – 9:15 a.m.

The Mid-America Club, 200 E. Randolph St. Chicago, IL 60601

Click here for details and to register

***DA: The interview will be a fireside chat conducted by our own John Lothian

CBOE RMC, Feb. 29-Mar 2, 2016, Bonita Springs, FL – Last chance to register!
Now in its 32st year in the U.S., the annual CBOE Risk Management Conference (RMC) is the premiere financial industry conference designed for institutional users of equity derivatives and volatility products. Hosted by the Chicago Board Options Exchange (CBOE), RMC is an educational forum dedicated to exploring the latest products, trading strategies and tactics used to manage risk exposure and enhance yields. RMC brings together top traders, strategists and researchers, enabling participants to learn the state-of-the-art in investment risk management from true experts in the field.|

WILD Networking With a Purpose Event
Women in Listed Derivatives
On Thursday, March 3, Women in Listed Derivatives (WILD) is offering an evening of speed networking that uses “smart matching software” to allow participants to target the types of people they are interested in meeting, based on customized matching parameters put together by WILD. This is the first such event open to men and non members as well as WILD members – a rare chance for men in the financial industry to participate and to help advocate for women’s opportunities as well as to make meaningful connections for themselves. Click below for full details and to register

Lead Stories

Commodities Agency Advised to Drop Plan to Limit Futures Contracts
The New York Times
A long-running fight between regulators seeking to curb speculation in the commodities markets and traders is heading into its next round. An advisory committee of the Commodity Futures Trading Commission — composed largely of representatives from the energy and trading industries — has recommended that the regulator abandon its plans to limit the number of futures contracts a trader can hold on certain commodities, including oil and natural gas, according to a copy of the recommendation that was reviewed by The New York Times.

Rationale behind LSE-Deutsche Börse deal finally works
Philip Stafford,
When Carsten Kengeter, the 48-year-old former UBS banker, arrived as chief executive of Deutsche Börse last summer he promised to shake up an organisation many felt had become too rule-bound, and had forgotten its customers. With its proposed deal to take over the London Stock Exchange Group, he has been as good as his word.

***DA: Also see: [[

|LSE-D Börse talks come at a contentious time]] from the FT.

Wealth Adviser Daily Briefing: Smaller Brokerages Want Their Voices Heard
MoneyBeat – WSJ
Fifteen brokerages have banded together to protest regulations imposed since the 2008 financial crisis that they say unreasonably treat smaller firms the same as giants like Morgan Stanley and Bank of America’s Merrill Lynch, writes Wealth Adviser. “You can’t just say we have to regulate trading and markets and have all of us comply with a rule written for the largest firms,” said Curt Bradbury, chief operating officer of Stephens Inc. and chair of the new American Securities Association.

First crowdfunded security to be traded on a secondary market in Europe
Euronext Expert Market as secondary market for crowdfunding instruments
Today, the first buy and sell orders of a crowdfunded security were placed on the Euronext Expert Market (Public Auction), an electronic trading platform for non-listed securities. These orders will lead to the first secondary transaction in a crowdfunding instrument on a transparent and secure trading platform in Europe, which will take place on Tuesday 1 March 2016 at 11.30am CET, as a result of matching the outstanding orders. The traded instruments are participatory notes in the Belgian company Domobios, issued by the crowdfunding platform MyMicroInvest. This first trade opens new perspectives for crowdfunding investors looking to transfer their participation to a third party in a secure and transparent environment.

AIG Says Goodbye to Guy Who Knew Where the Bodies Were Buried
Bloomberg Business
In January, Brian Schreiber was working nearly around the clock preparing an investor presentation on American International Group Inc.’s new direction, called Simplifying AIG. On Feb. 15, Schreiber simplified right out of a job.

OANDA to Acquire about 2000 IBFX Accounts as Monex Exits US FX
Finance Magnates
OANDA could increase its U.S. market share after acquiring from TradeStation about 2000 clients of its foreign exchange centered subsidiary IBFX. TradeStation which is owned by Monex Group Japan is exiting the retail foreign exchange business in the U.S. just over four years after acquiring IBFX for $17 million.

Ex-banker Carsten Kengeter moves fast to reshape Deutsche Börse
Carsten Kengeter was never going to hang about as chief executive of Deutsche Börse. A starkly ambitious former Goldman Sachs and UBS banker who pursues extreme skiing in his spare time, the 48-year-old has taken a different path at the helm of the Frankfurt-based exchanges group to his low-profile predecessor Reto Francioni.

Lew Says Don’t Expect `Crisis Response’ From Group of 20 Meeting
Bloomberg Business
U.S. Treasury Secretary Jacob J. Lew downplayed expectations for an emergency response to global market turbulence when Group of 20 finance chiefs and central bankers meet this week in China, calling on nations to do more to boost demand without pursuing unfair currency policies.

Fidessa’s Sentinel wins another compliance accolade
Fidessa group plc (LSE: FDSA) today announced that its Sentinel buy-side compliance product has won its third prestigious accolade in the last six months, winning Hedge Fund Manager’s Best Compliance Product at their Technology Awards this week. These awards recognize and reward hedge fund technology providers that have demonstrated exceptional customer service and innovative product development over the past 12 months.

European Union Updates Bank Stress Test Beyond Pass/Fail
Dealbook – NY Times
European regulators provided details on Wednesday for the latest stress test aimed at measuring the ability of the region’s lenders to survive a financial crisis or severe economic downturn.
Unlike tests in past years, the latest test will not have a minimum capital threshold that lenders will have to meet in order to pass. As a result, no bank can actually fail — or pass — the examination, according to the European Banking Authority, which regulates lenders in the European Union.

How Islamic State’s Secret Banking Network Prospers
More than a year of U.S.-led airstrikes and financial sanctions haven’t stopped Islamic State from ordering supplies for its fighters, importing food for its subjects or making quick profits in currency arbitrage. This is because of men such as Abu Omar, one of the militant group’s de facto bankers. The Iraqi businessman is part of a network of financiers stretching across northern and central Iraq who for decades have provided money transfers and trade finance for the many local merchants who shun conventional banks.


Cost of CFTC trading rule will top $15m – new report
Futures & Options World
Research firm Tabb Group has published a report estimating the initial cost of implementing the Regulated Automatic Trading regime in the US futures market will exceed $15million and that the cost for ongoing compliance will surpass $2million annually. The new research suggests that while the US futures regulator the Commodity Futures Trading Commission (CFTC) is aware of the expenses related to implementing Regulation Automatic Trading and wants to ensure the costs do not outweigh the benefits, it has not fully grasped what the financial impact will be.

ISDA Publishes Principles For US/EU Trading Platform Recognition
The International Swaps and Derivatives Association, Inc. (ISDA) today published a set of principles for achieving comparability determinations between US and European Union (EU) trading platforms. The paper analyzes the regulatory frameworks in the US and EU, with the aim of determining whether EU trading platforms should be deemed comparable with those in the US. Underpinning the analysis is the principle that regulators should focus on broad outcomes and similarities, rather than conduct a granular, rule-by-rule comparison of the two frameworks.

EU-UK Deal: Both Sides Better Off With Britain In, Say Main Group Leaders
Leaders of the main political groups in Parliament welcomed a fair EU-UK deal as an offer to the British people to remain in the EU. But it’s an “in or out” vote some said, not another phase in the negotiations. During the plenary debate on the outcome of the recent EU summit with European Council President Donald Tusk and Commission President Jean-Claude Juncker, many UK MEPs voiced arguments for and against EU membership.

MEPs split on how to protect package trades from Mifid II
Ferber warns amending text “risks opening Pandora’s box” Legislators are divided on how to protect so-called package trades from Europe’s trading and transparency rules, with time running out for any attempt to fix the rules themselves. Industry lobbyists and national regulators agree that packages – which require the simultaneous execution of two or more instruments – need special treatment in the pre-trade disclosure requirements in the updated Markets in Financial Instruments Directive (Mifid II)

Canadian securities regulators seek comment on derivatives rule relating to mandatory central counterparty clearing
AMF Canada
Members of the Canadian Securities Administrators (CSA) today published for comment Proposed National Instrument 94-101 Mandatory Central Counterparty Clearing of Derivatives and its companion policy (the proposed instrument), which introduces requirements for central counterparty clearing of certain over-the-counter (OTC) derivatives transactions.

Exchanges & Trading Facilities

CBOE Awarded Best Overall Exchange at Wall Street Letter Institutional Trading Awards Ceremony
The Chicago Board Options Exchange announced today that the exchange was awarded “Best Overall Exchange” at the fifth annual Wall Street Letter (WSL) Institutional Trading Awards last night in New York City.

Third time lucky for the London Stock Exchange and its German suitor?
The Telegraph
On the morning of May 3, 2000, Werner Seifert grabbed Don Cruickshank’s hand, and shook it firmly. The two men – heads of Deutsche Boerse and the London Stock Exchange respectively – were standing on the stage of an east London conference hall, having just announced a merger between the two exchanges.

Bats Promotes Tony Barchetto to Executive VP, Head of Corporate Development
Street Insider
Bats Global Markets (Bats) today announced the promotion of Tony Barchetto to Executive Vice President, Head of Corporate Development, effective immediately. With the promotion, Mr. Barchetto joins the Bats Executive Team, which includes CEO Chris Concannon, Bats Europe CEO Mark Hemsley and the following Executive Vice Presidents: Bryan Harkins, Head of U.S. Markets; Chris Isaacson, Global Chief Information Officer; Brian Schell, Chief Financial Officer; Tami Schademann, Chief Regulatory Officer; and Eric Swanson, General Counsel.

ISE Recognized as Best Options Trading Venue at Wall Street Letter 2016 Institutional Trading Awards
International Securities Exchange
The International Securities Exchange (ISE) today announced that it was named the “Best Options Trading Venue at the Wall Street Letter 2016 Institutional Trading Awards. In 2015, ISE achieved 100 percent market availability for both of its exchanges. In addition, ISE received an award for “Best Exchange – Client Service,” the second time that ISE has been recognized in this category.

Nasdaq invests in advanced market surveillance technology
Nasdaq has joined Goldman Sachs, Credit Suisse and partners at private equity firm Silver Lake in investing in an emerging US software provider aiming to use “cognitive computing” technology to detect abuses in capital markets.

LSEG Announces New Appointments Within Information Services Division
London Stock Exchange Group (LSEG) today announces the appointment of Lars Asplund as Global Head of Product Management and Marc Barrachin as Global Head of Fixed Income Product Management for the Group’s Information Services division. They will be based in New York. Mr. Asplund will report to Mark Makepeace, LSEG’s group head of Information Services and CEO of FTSE Russell. Mr. Barrachin will report to Asplund.

The Tel-Aviv Stock Exchange Has Signed An Agreement With Frost & Sullivan, Global Research & Consulting Firm, For The Analysis Of Listed Biomed & Technology Companies
The Tel-Aviv Stock Exchange (TASE) and the global consulting and research firm, Frost & Sullivan, announced today that they signed an agreement for the participation of Frost & Sullivan in the analysis program that TASE recently announced.

Face to face with Megan Morgan
Mrs. Morgan, how long have you been with Eurex Exchange and what did you do before you joined our company?
I have been with Eurex a little over 4 ½ years. I have always been in the trading industry in one way or another; I started out after school as a clerk at the CME and traded options at the CBOE before going to business school at Chicago Booth. Obviously, they are very integrated in the Chicago trading community. I did a three month consulting program with the CME while I was there working on New Product Development. When I left school to go into Asset Management at Lehman Brothers, I missed the excitement of trading and went to work for one of my customers, Climate Exchange helping build the carbon market in the US. It was a great experience toeing the line between public policy and financial markets. After Climate Exchange was sold, I went to work for Eurex

Replacing Francisco Oña and Antonio Giralt in these positions
BME has appointed the current director of the Equities and Derivatives markets operated by BME, Jorge Yzaguirre, as the new Chairman of AIAF, BME’s Private Fixed Income market, replacing Francisco Oña, who steps down on retirement grounds.
(No link)

Record-high Annual Revenue Positions GPW Group for Further Dynamic Growth
The GPW Group focused on three key areas in 2015: building up liquidity on the Group’s markets, maintaining IPO and SPO activity of issuers, and optimisation initiatives resulting in cost reductions and enhanced operational efficiency. As a result, the GDP Group generated sales revenues of PLN 327.9 million, a net profit of PLN 123.7 million, and EBITDA of PLN 179.5 million in 2015; all of these improved year on year.

(No link)


Donald ducks the big questions
The Economist
VICTORY this week in the Nevada caucuses, on top of recent triumphs in New Hampshire and South Carolina, makes Donald Trump the clear favourite to be the Republican nominee in America’s presidential election. Users of Predictit, a gambling website, collectively rate his chances at about 70%. Although many people think that Mr Trump cannot triumph in November, it is worth remembering that Hillary Clinton, the likely Democratic nominee, is hampered by several nagging scandals that could conceivably deepen.

Bernie Sanders: Wall Street Strikes Back Against Vermont Senator
Bernie Sanders has built his campaign on vilifying Wall Street and any politician who tries to court its support. Needless to say, the powers that be on Wall Street have not taken kindly to the Vermont Senator’s characterization of their industry.

Here’s How Michael Bloomberg Becomes President
The Daily Beast
Impossible, you say? In this crazy year, what’s impossible? Against Trump and Sanders, Bloomberg could win. Here’s how.

Hedge Funds & Managed Futures

Soros, Platt and Singer: The 25 highest-earning hedge fund managers of 2015
Investment Week
The list of the highest earning hedge fund managers and traders features Soros (pictured) as the tenth highest earner, taking in a total of $300m throughout 2015 with his company Soros Fund Management. Meanwhile, Bluecrest co-founder and chief executive Platt came in at 15th with $225m even though BlueCrest made the headlines as it announced it would return around $7bn of third party investor capital in order to become a private investment partnership.

Carlyle Co-Founders Each Collect Around $100 Million in 2015 Dividends
The Carlyle Group L.P.’s three founders each collected roughly $100 million in dividends and other compensation in 2015, but the private-equity firm stopped reporting returns on their investments in and alongside its funds.

US Treasurys are the place to be: Pimco’s Clarida
Global uncertainty may not be a good thing for U.S. equities markets and exports, but it is driving investors toward U.S. bonds, according to Richard Clarida, global strategic advisor and managing director at Pimco.

St. Louis Fed: Financial Markets Are Saying Oil Will Be Worthless by mid-2019
Bloomberg Business
The Federal Reserve has insisted that the forces keeping inflation from target are temporary. Financial markets seem to disagree. St. Louis Fed President James Bullard has been particularly worried about what the market is telling him about future inflation.

Pidcock: Australia is most underappreciated investment story in the world
Investment Week
Jupiter’s Jason Pidcock, manager of the Asian Income fund the group is launching next week, has made a case for why Australia is one of the most overlooked investment opportunities globally.

Banks & Brokers

Paragon Global Markets Sales Team Expands to Deliver Comprehensive Futures Brokerage Solutions to Global Client Base
Press Release
Paragon Global Markets, LLC (PGM), the New York based Independent Introducing Broker founded by industry veterans William Sexton and Stephen Grady, has announced that Adam Weis and Larry Bauman have recently joined the firm from ABN AMRO where they were responsible for managing clients of the bank’s London Metals Exchange (LME) and derivatives brokerage business.

Banks Brace for Potential Energy Losses
Banks are admitting what investors have long suspected: The energy bust is likely to result in major losses. Wells Fargo & Co. set aside $1.2 billion in reserves for potential losses tied to oil and gas loans, according to a Wednesday securities filing. About 10% of Wells Fargo’s total loan-loss reserves are related to oil and gas, even though those loans account for about 2% of its overall loan portfolio, the filing said.

Barclays Cut Investment Bank Bonus Pool as Much as 12%
Bloomberg Business
Barclays Plc cut the bonus pool for its investment bank by about 10 percent to 12 percent, according to people with knowledge of the matter. Individual employee variable pay for 2015 would have dropped more if the London-based bank wasn’t cutting 1,200 jobs worldwide and closing operations across Asia, said the people, who asked not to be identified because the compensation plan isn’t yet public. For 2014, the investment bank paid out 24 percent less in bonuses, with the pool falling to 1 billion pounds ($1.4 billion).

Bank Stocks Keep Getting Battered – MoneyBeat – WSJ
Bank stocks are getting battered yet again. Investors continued to race out of bank stocks Wednesday, pushing shares of the largest U.S. banks down between 3% and 4%. On Tuesday, shares of major U.S. banks closed down by sharply, continuing a tough year for an industry that’s been dogged by doubts.

ICAP Global Broking To Launch Iron Ore Volume Matching
ICAP plc (IAP.L), a leading markets operator and provider of post trade risk mitigation and information services, announces today that ICAP Global Broking intends to launch ‘Iron Ore Volume Matching’, an anonymous electronic mid-point volume matching service for the iron ore over-the-counter (OTC) market. Launching on 30 March 2016, Iron Ore Volume Matching is the first global electronic volume matching session in iron ore OTC futures and swaps and expands ICAP’s hybrid offering in the commodities market.

CIBC Raises Dividend; Profit Beats Views
Canadian Imperial Bank of Commerce, Canada’s fifth-largest bank by assets, raised its dividend Thursday and reported a fiscal first-quarter profit that beat expectations even as lower crude-oil prices pinched its results.

Clearing & Settlement

Comparing CCP Disclosures for CME, ICE, JSCC, LCH
Amir Khwaja, Clarus Financial Technology
Last week I wrote an article on European CCP Public Disclosures, following this I learn’t that in-fact the CPMI-IOSCO Public Disclosure is not limited to European CCPs but is Global. So there is a lot more data to look at. Today I will focus on the largest Interest Rate Swap CCPs and the largest Credit Default Swap CCPs and make a comparison using a few of the most noteworthy quantitative disclosure fields.

DTCC-Euroclear white paper examines implications of collateral settlement fails
DTCC-Euroclear Global Collateral, a joint venture (JV) of Euroclear and The Depository Trust & Clearing Corporation (DTCC), has published a white paper, Implications of Collateral Settlement Fails: An Industry Perspective on Bilateral OTC Derivatives.

Canadian securities regulators seek comment on derivatives rule relating to mandatory central counterparty clearing — MONTRÉAL, Feb. 24, 2016
Canadian NewsWire
Members of the Canadian Securities Administrators (CSA) today published for comment Proposed National Instrument 94-101 Mandatory Central Counterparty Clearing of Derivatives and its companion policy (the proposed instrument), which introduces requirements for central counterparty clearing of certain over-the-counter (OTC) derivatives transactions.

EMIR Clearing Obligations Update: Further Clarity on Pension- Publications
The European Securities and Markets Authority (ESMA) has provided further clarity regarding the operation of the clearing obligations under the European Market Infrastructure Regulation (EMIR), in terms of their applicability to pension schemes, and as regards to their operation in practice in relation to swaptions and frontloading.

Indexes & Products

S&P 500 Earnings: Far Worse Than Advertised
There’s a big difference between companies’ advertised performance in 2015 and how they actually did. How big? With most calendar-year results now in, FactSet estimates companies in the S&P 500 earned 0.4% more per share in 2015 than the year before. That marks the weakest growth since 2009. But this is based on so-called pro forma figures, results provided by companies that exclude certain items such as restructuring charges or stock-based compensation.

WisdomTree Launches CBOE S&P 500 PutWrite Strategy Fund (PUTW)
WisdomTree (NASDAQ:WETF), an exchange-traded fund (“ETF”) and exchange-traded product (“ETP”) sponsor and asset manager, today announced the launch of the CBOE S&P 500 PutWrite Strategy Fund (PUTW), on the NYSE Arca. PUTW seeks to provide investment results that, before fees and expenses, generally correspond to the performance of the CBOE S&P 500 PutWrite Index (PUT) and has a net expense ratio of 0.38%.

An Alternative Income ETF for a Weak Equities Market
ETF Trends
Income-seeking investors can utilize a newly launched alternative exchange traded fund strategy to generate yields in a slightly downward trending or sideways market. WisdomTree Investments launched the WisdomTree CBOE S&P 500 PutWrite Strategy Fund (NYSEArca: PUTW), according to a press release. PUTW has a 0.38% expense ratio.


FlexTrade Integrates Symphony’s Secure And Compliant Communications – Partnership Enables FlexTrade Users To Improve Workplace Productivity By Communicating With Symphony
FlexTrade Systems, a global leader in multi-asset execution and order management systems, today announced the integration of Symphony Communication Services LLC’s platform with FlexTRADER EMS. The integration brings secure and compliant messaging directly into the trading blotter for any FlexTrade clients using Symphony.

Apple Is Said to Be Trying to Make It Harder to Hack iPhones
The New York Times
Apple engineers have begun developing new security measures that would make it impossible for the government to break into a locked iPhone using methods similar to those now at the center of a court fight in California, according to people close to the company and security experts.

Google Gives Publishers What Facebook, Apple Haven’t: A Paywall
Bloomberg Business
The New York Times has moved guardedly with Facebook Inc. and Apple Inc., posting just 30 articles a day on new platforms controlled by those companies. Starting Wednesday, the Times will be posting more than double that number of stories on a new alternative newsreader promoted by Google Inc. The reason? The Times asks readers to buy digital subscriptions after getting 10 free articles a month. Google readers count toward that limit. Facebook and Apple readers don’t.

How Mobile Payments Reshape Lifestyles
Piao Jianfeng says he seldom carries his wallet and hasn’t used an ATM to withdraw cash for two years. Instead, his phone is his wallet, and he uses it to pay for almost all of his everyday needs in Beijing, from taxis to utilities and grocery bills.


CFTC Charges Florida Resident Neil Pecker and His Company, Vision Financial Partners, LLC, with Fraud in Connection with Off-Exchange Binary Options and Registration Violations
The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing of a civil enforcement Complaint in the U.S. District Court for the Southern District of Florida, charging Defendants Neil Pecker of Longwood, Florida, and his company Vision Financial Partners, LLC (Vision) of Deerfield Beach, Florida, with fraud in connection with off-exchange binary options. The CFTC Complaint also charges Vision and Pecker with acting as a Commodity Trading Advisor (CTA) and as an Associated Person of a CTA, respectively, without being registered with the CFTC, as required.

U.S. hedge fund faces probe in wake of failed Samsung battle
Paul Singer’s Elliott Management, which lost its high-profile proxy battle against Samsung Group last year, may be facing an investigation by prosecutors for failing to follow disclosure rules, according to a Korean media report.

New York Attorney General Eric T. Schneiderman Announces Settlements With Natixis And Societe Generale
Attorney General Eric T. Schneiderman today announced multimillion dollar settlements with Natixis Funding Corp. and Societe Generale for fraudulent and anticompetitive conduct in municipal bond derivative transactions with state and local government entities and nonprofits across the country. Natixis and Societe Generale will pay $29,950,000 and $26,750,000 respectively as part of a coordinated 22-state and private class settlement. Pursuant to the settlements, $53,865,000 will be paid into a Settlement Fund and largely applied to restitution for municipalities, counties, government agencies, school districts and nonprofits that the states allege were harmed when they entered into municipal derivatives contracts with Natixis or Societe Generale.

Environmental & Energy

Oil Slump May Hit U.S. Investment Banks’ Capital Market Revenue
Bloomberg Business
Revenue generated by U.S. investment banks through their capital markets businesses may “suffer” if oil and commodity prices stay low and the global economy slows further, Moody’s Investors Service has warned.

Saudi Arabia to U.S. Oilmen: Cut Costs or Exit the Business
Bloomberg Business
The world’s most powerful oilman brought a harsh message to Houston for executives hoping for a rescue from low prices: high-cost producers — many of them sitting in the room — need to either “lower costs, borrow cash or liquidate.”

Report: Paris Agreement sends ‘positive signal’ for carbon markets
Business Green
The Paris Agreement “provides a new impetus for a dynamic global carbon market”, according to a new study released yesterday by the International Carbon Action Partnership (ICAP) that predicts the next few years will bring a proliferation of new policies that seek to put a price on carbon emissions. The campaign group’s latest annual report predicts that thanks to the Paris Agreement and its specific commitment to support expanding carbon markets enthusiasm for market-based mechanisms for tackling emissions is rising around the world, with a number of countries trialling new pricing systems.

Half of the world calls for carbon markets to accelerate emissions reduction
The Emissions Trading Worldwide report from the International Carbon Action Partnership (ICAP) discovered that an increasing number of countries are trialling carbon markets which, if implemented correctly, could bring significant benefits to businesses and citizens.


Nikkei 225 in `Eerie’ Parallel to Lehman Prelude in 2008: Chart
Bloomberg Business
Japan’s Nikkei 225 gauge is tracing chart patterns seen in the 12 months through April 2008. A series of Federal Reserve rate cuts that began in September 2007 appeared too late, Norihiro Fujito, a strategist at Mitsubishi UFJ Morgan Stanley Securities, says in an interview today. The Nikkei fell 36% in the remaining eight months of 2008. The “eerie” parallel is unnerving, and may continue should U.S. and Japanese policy makers take the wrong actions, he said, referring to the recent Fed rate hike and a planned increase in Japan’s consumption tax.

China Unveils Its Deliverables for G-20 — And No Plaza Pact
Bloomberg Business
China began signaling what its officials plan to present to counterparts at the two-day Group of 20 meeting in Shanghai, laying out a platform for more government spending and renewed pledges of currency stability. Notably rejected in comments from Finance Minister Lou Jiwei published Thursday was a proposal that emanated from some private-sector analysts for a grand, 1985 Plaza Accord-style deal among G-20 members to guide exchange rates.

As China’s Economic Picture Turns Uglier, Beijing Applies Airbrush
The New York Times
This month, Chinese banking officials omitted currency data from closely watched economic reports. Just weeks earlier, Chinese regulators fined a journalist $23,000 for reposting a message that said a big securities firm had told elite clients to sell stock.

China Says It Has Solutions to Its Economic Problems
The New York Times
Chinese economic policy makers tugged back the curtain a bit Thursday on their plans to stabilize the country’s economy and financial markets, even as shares plunged more than 6 percent late in the day.

Frontier Markets

Vietnam Plans First Corporate Bond Platform to Meet Debt Demand
Bloomberg Business
Vietnam plans to open its first corporate bond-trading platform as it readies for an expected rise in issuance of company debt. The Hanoi Stock Exchange will submit proposals to the finance ministry and the State Securities Commission this month, Nguyen Thi Hoang Lan, deputy general director of the bourse, said in a phone interview Wednesday from Hanoi. The market is expected to start operating early next year if approved, she said.

Pimco Adviser Sees ‘The Trade of a Decade’ in Emerging Markets
Bloomberg Business
Emerging-market assets are so cheap that they may be “the trade of a decade,” according to Research Affiliates LLC, a sub-adviser to Pacific Investment Management Co., one of the world’s biggest money managers. They’re joining a growing number of investors, including BlackRock Inc., Franklin Templeton and Goldman Sachs Asset Management, who are turning bullish on emerging markets after three years of underperformance

Once booming, Pakistan’s bourse now sees some bloody days
Medill Reports Chicago
The year 2016 promised much, but so far delivered little in return as the KSE-100 Index has shed 5.5 percent. Pakistan’s equity market has been subject to a persistent drain of foreign investment amid a global selloff since the beginning of the year, despite the January merger of three stock exchanges that was intended to attract more foreign investment.

Stirrings of Labor Unrest Awaken as Russia’s Economic Chill Sets In
The New York Times
Workers in this city that calls itself the “birthplace of the trains” gained fame some years back for helping birth something far different: President Vladimir V. Putin’s drive to crush and marginalize a budding democracy movement. Recently, after a year with little or no work in the city’s giant train factory, they staged a protest of their own, aimed straight at Mr. Putin and his wealthy cronies in the industrial sector.

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