First Read

Mr. Lothian Takes One for the Team
After a long week in Boca Raton, FL, where we attended the annual FIA conference, John agreed to make the ultimate sacrifice and remained in south Florida for five more days in order to cover CBOE’s 30th Annual Risk Management Conference.

If you have never experienced the RMC, please check out the web site at jlne.ws/1gyjtAH. The 3-day conference is a must for institutional asset managers.

To rub it in a bit, John sent us a selfie of him sitting on a balcony overlooking the Gulf of Mexico as he sips his morning coffee. We get the last laugh, though. Tomorrow we will be sending him a picture of the staff NOT slaving away in the office.

John will be back in the office on Thursday. Meanwhile, Jim, Jon and the rest of us will toss in our two cents each morning. We once again thank Sarah and Jeff for keeping the assembly line of newsletters running last week.

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Boca Bits: Day Three and Final Thoughts
Chuck Mackie – Maven Wave
Thursday was the third and final day for FIA Boca and, while some of the panels lacked the pizzaz seen on Wednesday, the topics covered were both interesting and important and the improved attendance for the final day compared to years past highlighted this fact. Excuse me if things get a big text-heavy here but these are some pretty important issues that don’t necessarily lend themselves to clever photos!
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From Our Man At The 39th Annual International Futures Industry Conference. Tom Groenfeldt: Growth For Exchanges
Mondo Visione
Exchange leaders expect more exchanges will emerge from areas of the world that don’t have any now. “Each of us here has a pretty global business now,” said Jeffrey Sprecher, CEO of IntercontinentalExchange, “but I think there will probably be more than six big exchanges because there are parts of the world that are emerging.”
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***DA: Conference attendees were clearly hungry for the “big story” but in this area the conference fell short. No big announcements this year. The comments from the exchange leaders, though, led to whispers about possible global tie-ups.

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Deutsche Börse: James H. Freis, Jr., New Chief Compliance Officer
James H. Freis, Jr., is the new Chief Compliance Officer for Deutsche Börse Group. He takes over the responsibility from Michael Steinicke effective as of 1 April 2014. In this capacity, he will be responsible for overseeing compliance with relevant legal and regulatory requirements and company policies, as well as responsibilities towards supervisory authorities, among all Group entities.
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***DA: The CCO role is arguably emerging as the most important role in a company. Congratulations to Mr. Freis and, more importantly, good luck.

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New York Strips London of Mantle as World’s Top Financial Center
John Glover – Bloomberg
New York replaced London as the world’s leading financial center for the first time, after the City was rocked by a series of scandals and questions over the U.K.’s place in the European Union.
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***JK: Here is the full report: jlne.ws/1p3iutc. Chicago, our hometown, now ranks 15th, down from 14th last year and eighth in 2012. Is something wrong with Chicago as a financial center? It now ranks behind powerhouses such as Boston, San Francisco and Toronto, and a shade above Montreal, Vancouver and Shenzhen.

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CME Group fends off complaints over higher fees
Tom Polansek | Reuters
CME Group Inc , the world’s largest futures exchange operator, is facing mounting criticism from brokers over fee increases that are set to raise costs for futures customers.
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**JK – Still much buzz in the industry over the timing and cost of CME’s fees.

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Gary DeWaal’s Bridging the Week — March 10 to 14 and 17, 2014 (Vertical Clearing Model: Good or Bad, Bitcoins, and Failure to Supervise (Again))
Gary DeWaal and Associates LLC
No major developments occurred during the FIA’s Annual International Conference in Boca Raton, Florida last week, but plenty of important regulatory and legal developments occurred outside of the Sunshine State.
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**JK – No one covers regulatory matters in a fishing vest and baseball cap like Gary.

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Two Cheap and Easy Market Surveillance Fixes
Michael Friedman – TabbFORUM
The Consolidated Audit Trail promises to help regulators detect and investigate manipulation, but it is proving to be an enormous undertaking, and the market can’t afford to stand by and wait for its completion. Here are two quick fixes to enhance market surveillance while we wait for CAT.
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Banks, bubbles and the need to keep dancing
Luis Manuel Muñoz Escobedo – Financial News
Throughout the history of western civilisation, hostility towards finance and financiers has been a recurrent theme. This hostility has its origins in the idea that those who make a living out of lending money are somehow parasitical to what is now known as the “main street” economy. Since the development of modern capitalism during the second half of the 18th century, financial scandals and crisis have been frequent enough to make finance seem a cause of poverty and instability rather than an agent of progress.
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***DA: The author, a Masters student at London Business School, seems to fail to grasp the source of anger from the general public. Yes, finance is important and yes, failure to backstop the system during the crisis would have been tragic, but the current system heaps outsized benefits to the financial sector for both success and failure. This is wrong.

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The lost art of finance
Gillian Tett – FT.com
Last month I received a striking request from the Museum of Modern Art in New York. It was not an invitation to a trendy exhibition opening or an appeal for funds. Instead, MoMA curators were seeking blog posts from writers on pieces of art in its collection linked to exploitation and violence.
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MarketsWiki

MarketsWiki Page of the Day
Michael Dawley
jlne.ws/9AfI4p

MarketsWiki Recent Updates

People

Michael Dawley; Peter F. Borish; Thomas Matthew; Peter Reitz; Kenneth Rogoff

Companies, Organizations and Groups

McKay Brothers LLC; MCX Stock Exchange; FIA Global; Phillip Futures Inc.; Hong Kong Exchange and Clearing

Statistics

47,691,670 pages viewed, 7,850 articles, 180,547 edits
MarketsWiki Statistics

Lead Stories

Cotton traders welcome new futures market
Gregory Meyer in New York – FT.com
Cotton grown on five continents will underpin a new futures market for the fibre as the US loses its central role as a source of the commodity.
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**JK – Let’s call the launch a soft opening.

F.D.I.C. Sues 16 Big Banks Over Rigging of a Key Rate
NYTimes.com
The Federal Deposit Insurance Corporation has sued 16 big banks that set a crucial global interest rate, accusing them of fraud and conspiring to keep the rate low to enrich themselves.
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Banking’s back room risk cops step into top jobs
Reuters
Once modest of pay and profile, risk experts are being reborn as rock stars of the banking world – their status and salaries soaring as regulators force financial institutions to clean up.
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Russian Richest Face Margin Calls With Billions at Stake
Bloomberg
Billionaires in Russia and Ukraine risk further losses as market volatility and the threat of Iran-style economic sanctions intensify following Russia’s incursion into Crimea. Since Feb. 28, the day unidentified soldiers took control of Simferopol Airport in southern Ukraine, Russia’s 19 richest people have lost $18.3 billion, according to the Bloomberg Billionaires Index, a daily ranking of the world’s 300 richest wealthiest people.
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‘Bitcoin creator’ Dorian Satoshi Nakamoto denies links to currency
Ben McLannahan in Tokyo – FT.com
The California man identified by Newsweek as “Satoshi Nakamoto”, the semi-mythical founder of Bitcoin, has issued an “unconditional” denial of the magazine’s story, saying the first time he had heard of the virtual currency was last month when a reporter began quizzing members of his family.
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**JK – With Leah Goodman on the story, how could that be wrong?

Coffee Fuels Drive for Drugs for Parkinson’s to Dementia
Kristen Hallam – Bloomberg
For clues to treatments for Parkinson’s and Alzheimer’s, scientists are looking at their morning cup of joe. What they’ve found is that caffeine, the world’s most widely used drug, does more than wake people up. It’s been linked to improvements in memory and appears to protect against the destruction of brain cells.
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Regulatory

Dealpolitik: Ruling Isn’t Entirely the Gift for Buyouts It Appears to Be
Ronald Barusch – MoneyBeat – WSJ
On Friday the Delaware Supreme Court issued a groundbreaking ruling on how controlling shareholders can avoid the messy litigation that often follows a deal when they buy out minority shareholders.
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Statement At SEC Open Meeting By Secchair Mary Jo White – Washington, D.C. -March 12, 2014
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IMF Executive Board Discusses Further Considerations On Assessing Reserve Adequacy
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Exchanges & Trading Facilities

From Our Man At The 39th Annual International Futures Industry Conference. Tom Groenfeldt: Exchanges Hire From Military And NSA For Cybersecurity
Mondo Visione
NASDAQ OMX has hired from national labs and the military to improve its security against cyber attacks, its CEO, Robert Greifeld, said during a panel on exchanges at FIA Boca. “We had to look for best of breed, and the only place to find that was in the military,” he said. The exchange has also hired security experts from Livermore National, Laboratory, and some from the NSA.
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NYSE Arca rolls out initiatives to attract ETP listings
Yakob Peterseil – Risk.net
Despite being home to roughly 1,400 of the 1,500 ETPs listed in the US, NYSE Arca faces tough competition from rival exchanges and dark pools. Yakob Peterseil talks to Laura Morrison, the exchange’s senior vice-president for global index and exchange-traded products
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Tension in Fese as execs go off-piste
Anish Puaar – Financial News
A split is growing within the Federation of European Securities Exchanges, one of the region’s most powerful lobby groups, as it formulates its response to new EU trading rules and seeks to repair ties with brokers.
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NZX Consults On New Market
NZX is pleased to launch the consultation process on a proposed new growth market (the “New Market”). The New Market is an exciting innovation in New Zealand’s capital markets. It is designed to provide small and mid-sized New Zealand businesses with an easier and lower cost alternative to accessing external capital.
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FESE European Equity Market Report – February 2014 Figures
The European Equity Market Report is a piece of analysis that allows for an accurate comparison of trading statistics across European trading venues.
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MIAX Options Exchange: MIAX Options – FIX Order Auto Cancel On Disconnect (ACOD) New Date To Be Determined
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TOM MTF Statistics Week 11, 2014
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Hedge Funds & Managed Futures

Och-Ziff to Restate Financials on Collateral Loan Obligations
WSJ.com
Hedge-fund manager Och-Ziff Capital Management Group LLC said it will restate by Tuesday some of its 2012 and 2013 financial figures after deciding to consolidate the collateralized loan obligations it manages, following a review by Securities and Exchange Commission staff.
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Japan’s pension giant: Risk on
The Economist
WHEN George Soros, a billionaire investor, met Shinzo Abe, the prime minister of Japan, at Davos in January, he hectored him about asset management. Japan’s massive public pension fund needed to take more risk, he reportedly told Mr Abe. With Y128.6 trillion ($1.25 trillion) of assets, the Government Pension Investment Fund (GPIF) is the world’s biggest public-sector investor, outgunning both foreign rivals and Arab sovereign-wealth funds. Yet its mountain of money is run by risk-averse bureaucrats using an investment strategy not much more adventurous than stuffing bundles of yen under a futon. It keeps around two-thirds of assets in bonds, mostly of the local variety. Like an investing novice, it mostly follows indices passively, and hardly ventures abroad.
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Buffett gets the better of everyone, version 4,762
Dan McCrum | FT Alphaville
We have always admired Warren Buffett’s ability to combine hard headed capitalism with incredible popularity. America’s favourite billionaire and all that. But in his latest deal to swap shares in Graham Holdings for a Miami TV station, cash and stock, Mr Buffett appears to have come out on top once again, pushing a terrific deal for Berkshire past a board stuffed with serious people.
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Pimco in Orange County mandate review
Sarah Krouse – Financial News
A California state mandate to manage $430 million that Pimco has held since 1995 is to be put out for bids in the open market for the first time.
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Damage control at Pimco after Gross, El-Erian clash
Reuters
In mid-February, a group of current and former Pimco employees were invited to a private farewell party for Mohamed El-Erian on March 10, to mark his impending departure as chief executive of the world’s largest bond fund. El-Erian soon realized it was not a good idea, according to three sources who had received the invitations and are in contact with him.
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Pimco’s Virginie Maisonneuve gets tactical
Joe McGrath – Financial News
Pacific Investment Management Company – better known globally as Pimco – has found itself in the spotlight more than it would have liked recently.
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Calls for managers to open up their smart beta indices
Mike Foster – Financial News
Europe’s Edhec-Risk academic institute is stepping up a campaign to force asset managers to disclose the stocks they use in “smart beta” indices – potentially disclosing the “secret sauce” they use in attempts to outperform conventional benchmarks.
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Asset managers losing friends over costs and risk
Mike Foster – Financial News
Last year’s surge in profits for asset managers is starting to fuel a backlash from clients, politicians and cheap providers. The outcome may not be pleasant.
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Haunted by the Bull That Got Away
MoneyBeat – WSJ
It might have been. Those aren’t only the saddest words for lovers, as the poet John Greenleaf Whittier wrote, but also for investors.
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Bond funds worldwide attract $3.5 bln inflow – BofA
Reuters
Fund investors worldwide poured $3.5 billion into bond funds in the week ended March 12, reversing the prior week’s $1.8 billion in outflows, data from a Bank of America Merrill Lynch Global Research report showed on Friday.
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Taking the long view on investments
Mike Foster – Financial News
The introduction of measures to encourage long-term thinking among investors and companies has been a distinctly long-term process. While evidence exists that those with a long investment horizon reap the rewards, market practitioners are uncertain about the impact of the Kay report on decision-making.
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Fortress-Linked Pantera Said to Invest in Top Bitcoin Exchange
Carter Dougherty – Bloomberg
Pantera Capital Management LP, the hedge fund that manages money for Fortress Investment Group LLC (FIG) executives, invested about $10 million in Bitstamp Ltd. months before the startup emerged as the world’s dominant dollar-Bitcoin exchange, according to three people briefed on the deal.
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CFTC Commitments Of Traders Reports Update
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Banks & Brokers

Credit Suisse’s German offices searched in insider trading probe
Reuters
Credit Suisse’s headquarters in Germany was one of the offices raided by German authorities last month as part of an investigation into insider trading, a spokeswoman for the state prosecutor’s office in Stuttgart said.
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Guggenheim Snags Lazard Capital Markets Fixed-Income Team
Gillian Tan – MoneyBeat – WSJ
Guggenheim Securities, the investment banking and capital markets business of Guggenheim Partners, is hiring the majority of LazardLAZ -1.17% Capital Markets LLC’s fixed-income team, according to people familiar with the matter.
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Discount brokers’ volumes rise as small investors pile into stocks
Reuters
The three biggest U.S. discount brokerage firms said their stock trading volumes jumped in February from a year earlier, an indication that confidence by small investors in the stock market is continuing to gain after being fairly moribund in 2013.
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Nomura: the great sales and trading experiment
Matt Turner and Tim Cave – Financial News
Take a walk around Nomura’s giant trading floor on the third level of its London office off Upper Thames Street and it soon becomes clear that its make-up is a microcosm of the changing nature of the bank’s markets business.
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Clearing & Settlement

From Our Man At The 39th Annual International Futures Industry Conference. Tom Groenfeldt: Clearing Regulation Operates In Parallel Universes
Mondo Visione
Perhaps unconsciously channeling Angela Merkel’s evaluation of Vladimir Putin, Jerome Kemp, global head of Citi futures & OTC clearing, said the U.S. and Europe are operating in parallel universes when it comes to regulation.
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AQX Securities Selects BNP Paribas Securities Services As Central Settlement Partner For Its Global, Multi-Asset Trade Executions
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Indexes & Products

EDHEC-Risk Institute Survey Documents Unmet Institutional Investor Requirements For Transparency Of Indices
Between August and November 2013, EDHEC-Risk Institute surveyed 109 institutional investors from across Europe, including Europe’s largest pension and reserve funds, insurance and provident institutions and their asset management subsidiaries, to document their expectations and requirements with respect to index transparency and take stock of their perceptions of, and the extent of their support for, the main directions of the ongoing regulatory debate on indexing and financial benchmarks.
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Protecting the secret formula of active ETFs
Peter Davy – Financial News
Providers of exchange-traded funds are increasingly looking to launch products to meet investor appetite for active strategies that outperform benchmarks. But the requirement to disclose daily data in the US has deterred some active managers who are unwilling to make public the secret ingredients of their successful products.
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Thomson Reuters Launches Investable Private Equity Index And Private Equity Benchmark
Indices Measure Performance Of US Private Equity Industry By Tracking Transaction-Level Returns Of Private Equity Fund Investments Before Fees
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S&P Dow Jones Indices Announces Changes To The S&P/TSX Canadian Indices – Q1/2014 S&P/TSX Index Review
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[TSE] Publication of ETF/ETN Annual Report 2013
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Technology

Banks seek ways to attract IT talent
Anna Irrera – Financial News
When billions of dollars depend on your information technology, it had better be good. That is why banks need the best IT talent, and lots of it. The global IT workforce at Credit Suisse is 10,000. At Goldman Sachs it is 8,000. JP Morgan employs 4,500 people in IT in Europe.
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FinTech Startups Benefit from Buy-Side Investment Trends
Becca Lipman – Wall Street & Technology
Cutting edge technology vendors have retargeted their products for the buy-side, a welcome change after years of stagnant technology spending.
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Byrne Leaves SunGard for Confluence
Nicholas Hamilton – WatersTechnology
After almost 20 years at SunGard, Hugh Byrne has taken responsibility for Confluence’s European sales
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Enforcement

S.E.C. Takes Aim at Another Former SAC Employee
SYDNEY EMBER – NYTimes.com
The Securities and Exchange Commission’s investigation into Steven A. Cohen’s hedge fund, SAC Capital Advisors, isn’t done just yet.
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Bugatti-Driving 26-Year-Old Tied to Penny-Stock Website
Zeke Faux – Bloomberg
Short-sellers and stock promoters have puzzled for years over who operated one of the largest penny-stock websites. A U.S. lawsuit points to a Bugatti-driving 26-year-old from Montreal.
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Instinet Australia Pty Limited Pays $50,000 Infringement Notice Penalty
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Environmental & Energy

Everyone is bad at pricing carbon — and society is paying
Ben Walsh | Counterparties
A new report by the Environmental Defense Fund, the Institute for Policy Integrity, and the National Resource Defense Council shows how far away we are from understanding carbon emissions’ full cost to society.
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Asia-Pacific

DBS buys SocGen’s Asia private banking business
Jeremy Grant in Kuala Lumpur – FT.com
DBS, southeast Asia’s biggest bank by assets, has bought the Asia private banking business of Société Générale for $200m in cash, in the latest illustration of Singapore-based banks’ push into wealth management.
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HKEx: Charles Li’s Comments on Alibaba’s US Listing Plan
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Singapore Sting
Alex Frangos – MoneyBeat – WSJ
Singapore’s stock exchange felt it needed to clarify the issue. “Media commentaries” had noticed that the share price of agricultural trader Olam International had a nearly 40% run-up in the six weeks before a group led by Singapore state fund Temasek announced a bid for the company.
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Regulatory announcement: SGX Clarifies Olam International Issue
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Tokyo Commodity Exchange And DME To Collaborate On Energy Products
The Tokyo Commodity Exchange, Inc. (TOCOM), Asia’s leading commodity derivatives exchange listing industrial and agricultural products, and DME, the premier international energy futures and commodities exchange in the Middle East, today announced that they have signed a Memorandum of Understanding (MoU) on March 12 to strengthen their cooperation in promoting the development of energy contracts and in particular crude oil which is listed on both exchanges.
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Tokyo Commodity Exchange To Adust Trading Hours And First Day Trade Schedule From July 2014
The Tokyo Commodity Exchange, Inc. announced today updates to exchange trading hours and contract specifications. The changes, designed to offer increased trading opportunities, will start in July 2014 and are pending regulatory approval.
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HKFE Announces Revised Margins for CITIC Pacific Futures
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Frontier Markets

Africa hits a bump on the road to prosperity
Javier Blas in Johannesburg – FT.com
South of the Sahara, economies have flourished over the past decade, earning the continent the moniker ‘Africa Rising’. But growing pains are emerging, clouding the short-term outlook for a region that has become a magnet for foreign investors.
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Managing emerging market exposure
Peter Davy – Financial News
The sell-off in emerging markets’ currencies at the beginning of this year demonstrated the dangers of investing in growth markets, yet some pension funds are continuing to increase their exposure.
jlne.ws/1gEWNLy

Holes expected in South Africa’s draft clearing rules
Lukas Becker – Risk.net
Long-awaited clearing rules will arrive in draft form during March, dealers believe – but won’t say what firms are caught or when regime starts
jlne.ws/1gEWNLA

Dubai considers rule change to lure more domiciled funds
Reuters
Dubai is considering regulatory reforms to persuade more funds to base themselves in its financial centre, though industry experts believe that other parts of its investment environment may also need to change for the emirate to compete globally.
jlne.ws/1gEWOiq

Africa hits a bump on the road to prosperity
FT.com
South of the Sahara, economies have flourished over the past decade, earning the continent the moniker ‘Africa Rising’. But growing pains are emerging, clouding the short-term outlook for a region that has become a magnet for foreign investors.
jlne.ws/1gEWOir

Qatar Exchange Concludes A Training Program For Its Directors On Strategic Planning And Effective Leadership
jlne.ws/1gEWOit

NASDAQ Dubai Academy To Provide Training For The CFA Institute Claritas Investment Certificate
‘Claritas Prep Pro’ Course To Be Conducted In Association With Genesis Institute
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Tehran Stock Exchange Weekly Digest – 12 March 2014
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Nigerian Stock Exchange Weekly Report For The Week Ended 14 March 2014
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MCX Weekly Market Report – March 07, 2014 To March 13, 2014
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Accenture Opens New Innovation Center For Financial Services In Jakarta
Center Showcases How Financial Institutions Can Offer World Class Digital Banking Solutions To Customers In Indonesia
jlne.ws/1gEWQH9

Accenture Opens New Innovation Center For Financial Services In Jakarta – Center Showcases How Financial Institutions Can Offer World Class Digital Banking Solutions To Customers In Indonesia
jlne.ws/1gEWQH9

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