The ‘Flash Crash’ Case Doesn’t Add Up
BY KURT EICHENWALD, Newsweek
Few things are more satisfying than watching corporate criminals get what they deserve. The damage these people inflict on their victims always outweighs the impact of some schmuck who robs a liquor store. But all too often the silk-suited crowd gets off without even a hand slap, while the other crook gets dumped in prison for decades.
***** What do you think about this case? Send me your anonymous thoughts and I will post them (anonymously) to my blog.
Facing off to Big Data
Posted by Steve Grob
Our latest FidessaVision episode explores the relationship between financial markets and Big Data.
Goldman backs fundraising by payments company Circle
Stephen Foley in New York, FT
Goldman Sachs is backing the latest fundraising by Circle Internet Financial, a mobile payments start-up built on the bitcoin network.
****** There is a paradigm shift in the manner in which people are looking at Bitcoin and blockchain technology. It is a potential game changer.
Student-Loan Surge Undercuts Millennials’ Place in U.S. Economy
Surging student-loan debt represents a key risk to the economy’s expansion because wage gains are failing to keep up, according to Beth Ann Bovino, U.S. chief economist at Standard & Poor’s. As the attached chart illustrates, the dollar amount of borrowing has increased in each quarter since 2003, when data compiled by the Federal Reserve Bank of New York begins. The chart also displays student loans as a percentage of consumer debt, which has consistently risen since 2007’s third quarter.
****** And yet, there is tremendous value to the economy being created by 20-somethings.
Top 10 Trends in the FCM Business
By Matt Simon, Tabb Group
The traditional FCM model has been under pressure since the financial crisis, forcing many firms out of the business. The industry survivors, left to adapt to new market conditions, must continue to improve their business models by adding to their core functionalities. Here are the top 10 FCM trends that executives believe are most critical to their transformation.
***** The list excludes becoming a sponsor of John Lothian News because that is a given.
MarketsWiki Page of the Day
MarketsWiki Recent Updates
Companies, Organizations and Groups
62,275,864 pages viewed, 8,175 articles, 191,323 edits
CTX and MGEX Announce Key Partnership
MINNEAPOLIS – Carbon Trade Exchange (CTX), a global leader in environmental
commodity markets, and the Minneapolis Grain Exchange, Inc. (MGEX), a Designated Contract Market and Derivatives Clearing Organization recognized by the U.S. Commodity Futures Trading Commission, have today announced the establishment of a new business relationship.
SEC Nods to Industry in Proposals on CEO Pay, Overseas Swaps
The five-member SEC voted unanimously to propose a measure that would allow overseas banks to conduct some derivatives trades without having to comply with U.S. regulations. The SEC also proposed a requirement for companies to show annual comparisons of executive pay and the stock’s performance. The rule would allow companies to omit new stock and options, which can make up the biggest part of compensation.
***DA: Erik, one of our new interns, is a self-proclaimed regulatory wonk-in-training. I am happy to be handing the responsibility of building the pages in MarketsReformWiki
Financial Giants Set Up Tech Hubs in Manhattan; Companies feel having tech centers in hip urban neighborhoods allows them to tap into new ideas
By KEIKO MORRIS, WSJ
Multicolored Lego blocks sit in a jumble on a conference-room table. A plastic bubble gun and a mannequin’s leg are on desks at different corners of the room. Rowdy games of ping pong break out, often preparation for another few hours of work. Late one afternoon, two men in T-shirts drop to the floor and do push-ups—the alternative would have been to have a cup of coffee.
China Raises Investment Cap for Foreign Investors
China allows foreign investors to buy $10 billion more of stocks, bonds
By FIONA LAW, WSJ
China gave foreign investors, including Singapore’s sovereign-wealth fund and the Australian arm of Vanguard Group, access to buy a further $10 billion worth of the country’s stocks and bonds as Beijing accelerates the opening up of its markets.
Wall Street Pushes Back on Foreign Bribery Probe; Banks are embroiled in a dispute with the U.S. government over what they term its “aggressive” interpretation of antibribery laws
By JEAN EAGLESHAM and EMILY GLAZER in New York and NED LEVIN in Hong Kong, WSJ
Wall Street banks are embroiled in an intense dispute with the U.S. government over its “aggressive” interpretation of foreign-bribery laws, a flurry of legal wrangling in a probe with broad implications for how corporations do business overseas, according to people familiar with the matter.
BGC plans to sell Trayport unit after receiving approaches
Philip Stafford in London, FT
BGC Partners, the US interdealer broker, is looking to sell Trayport, one of its electronic trading venues, after being approached by several parties in recent months, its chief executive has said.
BIS – OTC derivatives statistics at end-December 2014
OTC derivatives markets contracted in the second half of 2014. The notional amount of outstanding contracts fell by 9% between end-June 2014 and end-December 2014, from $692 trillion to $630 trillion. Exchange rate movements exaggerated the contraction of positions denominated in currencies other than the US dollar. Yet, even after adjusting for exchange rate movements, notional amounts were still down by about 3%.
LSE to bring block trading to ETFs
The London Stock Exchange (LSE) has revealed plans to launch a block trading facility for exchange-traded funds (ETFs) next month, saying it hopes to capture a significant portion of current OTC trades.
Integral Launches First Subscription-Based FX Exchange
OCX, which is being launched by Integral, will be the only existing FX platform that combines liquidity from more than 100 electronic market making sources along with ECNs, a participant’s own bilateral disclosed relationship liquidity and the resting orders of the entire OCX community. In addition, OCX will democratize foreign exchange trading by allowing truly open access to anyone in the market for a nominal monthly subscription fee.
ALLSTON HOLDINGS HIRES PETER MERRITT TO LEAD FIRM’S ENTRANCE INTO METALS MARKET
Allston Holdings LLC
Allston Holdings LLC today announced that veteran trader Peter Merritt will lead its new metals trading team. Chicago-based Allston is a leading electronic trading and market-making firm focusing on futures and options trading.
Stress Testing of Liquid Fund and Money Market Mutual Fund Schemes
ASIC accepts new enforceable undertaking from Wealthsure Pty Ltd and Wealthsure Financial Services Pty Ltd
ASIC has accepted new, separate enforceable undertakings (EU) from Wealthsure Pty Ltd (WPL) and Wealthsure Financial Services Pty Ltd (WFS) to replace a joint EU first accepted in August 2013.
Self-Regulatory Organization (SRO) Rulemaking and National Market System (NMS) Plans
NYSE Arca: Notice of Filing of Proposed Rule Change to Amend NYSE Arca Rules 3.1 and 3.3 and Section 4.01(a) of the Exchanges Bylaws to Establish a Regulatory Oversight Committee as a Committee of the Board of Directors of the Exchange (Release No. 34-74824; File No. SR-NYSEArca-2015-29; April 28, 2015); see also Exhibit 5
NYSEMKT: Notice of Filing of Proposed Rule Change to Amend the Sixth Amended and Restated Operating Agreement of the Exchange (Release No. 34-74825; File No. SR-NYSEMKT-2015-27; April 28, 2015); see also Exhibit 5
SEC Proposes Rules to Require Companies to Disclose the Relationship Between Executive Pay and a Company’s Financial Performance
Rules Would Provide Greater Transparency and Better Inform Shareholders
The Securities and Exchange Commission today voted to propose rules to require companies to disclose the relationship between executive compensation and the financial performance of a company. The proposed rules, which would implement a requirement mandated by the Dodd-Frank Act, would provide greater transparency and allow shareholders to be better informed when they vote to elect directors and in connection with advisory votes on executive compensation.
SEC Proposes Cross-Border Security-Based Swap Rules Regarding Activity in the U.S.
Rules Would Provide Increased Transparency and Enhanced Oversight
The Securities and Exchange Commission today voted to propose rules governing the application of certain requirements to security-based swap transactions connected with a non-U.S. person’s dealing activity in the United States. The rules require a non-U.S. company that uses U.S. personnel to arrange, negotiate, or execute a transaction in connection with its dealing activity to include that transaction in determining whether it is required to register as a security-based swap dealer.
Just what constitutes net worth? NFA cites associate who included valueless items as client assets
By Andrew Saks-McLeod
Associate of introducing broker GFET, Harmik Iranossian allegedly estimated a prospective customer’s net worth at around $18,000 when, in reality, the prospective customer was insolvent
The US National Futures Association (NFA) has filed a complaint against Harmik Iranossian, who was an NFA Associate and registered associated person (AP) of Global Futures Exchange & Trading Co., lnc. (GFET), an introducing broker located in Tarzana California.
Exchanges & Trading Facilities
Average daily volume of 9.6 million contracts at Eurex Group in March
Trading volumes at Eurex Exchange grew by 10 percent in Q1 2015
In March, the international derivatives exchanges of Eurex Group recorded an average daily volume of 9.6 million contracts (March 2014: 9.4 million). Of those, 7.3 million were Eurex Exchange contracts (March 2014: 7.0 million), and 2.3 million contracts (March 2014: 2.4 million) were traded at the U.S.-based International Securities Exchange (ISE). In total, 159.8 million contracts were traded at Eurex Exchange and 50.0 million at the ISE.
Single Stock Futures: Introduction of eleven SSFs due to corporate actions; Single Stock Dividend Futures: Introduction of two SSDFs due to corporate actions
The Management Board of Eurex Deutschland and the Executive Board of Eurex Zürich AG took the following decisions with effect from 6 May 2015:
CME Group Inc. Reports Strong First-Quarter 2015 Financial Results
First-quarter 2015 revenues rose 8 percent from first-quarter 2014 and represented second highest quarterly revenue
First-quarter 2015 net income attributable to CME Group and diluted earnings per share both grew more than 15 percent from first-quarter 2014
Apr 30, 2015
CME Group Inc. (NASDAQ: CME) today reported revenues of $843 million and operating income of $507 million for the first quarter of 2015. Net income attributable to CME Group was $330 million. GAAP and adjusted diluted earnings per share were $0.981.
EEX Group reaches a New Record FY 2014
In the 2014 financial year, the (EEX) generated a new record result through significant increases in sales, particularly, on the power and gas markets. Additionally, the sales revenue of EEX Group rose by 24 percent to EUR 77.1 million (2013: EUR 62.2 million) in the 2014 financial year. The earnings before tax (EBT) rose by 39 percent to EUR 24.0 million (2013: EUR 17.3 million).
CBOE Holdings Declares Second Quarter 2015 Dividend
CBOE Holdings, Inc. (NASDAQ: CBOE) announced today that its Board of Directors has declared a quarterly cash dividend of $0.21 per share of common stock payable on June 19, 2015, to the unrestricted common stockholders of record on May 29, 2015.
Nasdaq apologises for 45-second Twitter earnings release error
Nicole Bullock in New York, Hannah Kuchler in San Francisco and Gina Chon in Washington, FT
An “operational” error that lasted only 45 seconds was behind the premature release of Twitter’s disappointing quarterly results on Tuesday, Nasdaq admitted as the social media site’s shares fell sharply for the second day running.
Nasdaq faces questions over Twitter release
The mood ahead of a big earnings release is typically tense. The anticipation for Twitter’s quarterly results on Tuesday was interrupted by, ironically, a tweet that revealed its results about an hour ahead of schedule. Worse yet, the news was not good. Twitter missed revenue expectations and lowered full-year guidance. It shares fell as much as 26 per cent, shaving more than $6bn from its market capitalisation.
BME POSTS EUR47 MILLION NET PROFIT, UP 11.5% YOY
The best quarterly result in the last seven years
Revenue for the first quarter stood at EUR93 million, up 8.2% year-on-year
EBITDA increased by 8.9% to EUR66.3 million
The efficiency ratio and the Return on Equity (ROE) improve 0.4 and 1.6 points respectively compared to a year ago
Investment flows channelled by the exchange between Janu¬ary and March 2015 amounted to EUR4.4 billion, ranking second world market by IPOs volume
Hedge Funds & Managed Futures
Venture Capitalists Enlist Student-Run Funds to Find the Next Facebook; Groups invest in young companies in hopes of discovering an early startup winner
By ADAM JANOFSKY, WSJ
On a late Friday afternoon earlier this month, a dozen students crowded around a table in an office overlooking New York City’s Madison Square Park. Their mission: deciding whether to invest a chunk of a $3 million fund into a student-led startup.
Bernanke adds role as Pimco senior adviser to his jobs portfolio
Stephen Foley in New York, FT
Ben Bernanke is taking a role as senior adviser to Pimco, adding a second asset management firm to his portfolio of post-Federal Reserve paymasters.
MAITLAND HIRES SCOTT PRICE TO LEAD GROWTH CHARGE IN THE US
Scott Price joins as Head of Business Development and Client Management for North America
Global advisory, fund administration and fiduciary services firm Maitland has hired Scott Price to spearhead its ambitious growth aims in the US market. Scott will be joining the firm as Head of Business Development and Client Management for North America. The announcement comes during a period of rapid global growth for Maitland, following hot on the heels of its expansion into the UK market via the acquisition of Phoenix Fund Services.
Banks & Brokers
Goldman Sachs Programmer’s Trial Resumes After Jury Disruption
By MATTHEW GOLDSTEIN, NY Times
Jury deliberations in the criminal trial of Sergey Aleynikov, a former Goldman Sachs programmer, resumed on Wednesday after a judge removed two feuding jurors from the panel.
Credit Suisse Monitor Neil Barofsky Does Job With Gusto; Former TARP watchdog has leeway to dig into bank’s past dealings with Americans
By JOHN LETZING and CHRISTOPHER M. MATTHEWS, WSJ
If Credit Suisse Group AG thought pleading guilty to a charge of aiding U.S. tax evasion and agreeing to big fines last year would firmly put the issue behind it, the Swiss bank wasn’t reckoning on Neil Barofsky.
RBS warns of year of pain amid worse than expected quarterly loss
Emma Dunkley and Laura Noonan, FT
Royal Bank of Scotland warned that it faces a year of pain as a mammoth restructuring project and litigation costs responsible for a worse than expected first-quarter loss loom large over the rest of 2015.
BNP Reports Increase in Profit on Investment Bank
BNP Paribas SA, France’s biggest bank, reported higher first-quarter profit as the euro’s decline helped boost earnings at its corporate and investment bank.
Net income rose to 1.65 billion euros ($1.85 billion) from 1.4 billion euros a year before, the Paris-based bank said on Thursday. Earnings beat the 1.38 billion-euro average estimate of eight analysts surveyed by Bloomberg.
Clearing & Settlement
Swapclear props up LCH income after LME exit
Futures & Options World
The London Stock Exchange said first quarter growth within its LCH.Clearnet Swapclear business made up for the loss of the London Metal Exchange’s clearing business as the exchange group reported solid financial performance. The LSE said in a statement on Wednesday that LCH.Clearnet revenues for the three quarters to the end of March were “flat after adjusting for currency changes and the previously announced loss of the LME commodities clearing with good growth in Swapclear (revenues up 16%).”
Mobile Payments’ Retail Investment And The Value Chain
Banks still come out on top when it comes to retailers and billing organizations’ trust of providing payment services. This gives them an advantage on the payments side. When it comes to contactless cards, real-time clearing and settlement, that’s where the advantage is seen, with 68 percent of those surveyed picking banks as their preferred carriers for the first, and 66 percent listing banks for the latter. But when it comes to other payments options that aren’t inherently banking-focused, the percentages begin to drop in the survey.
Indexes & Products
UBS: Chinese A shares unlikely to make MSCI in June
China’s A-share market is unlikely to make it to the MSCI emerging market index in June or any time before a planned Shenzhen-Hong Kong stock trading platform comes on stream, UBS said Thursday. David Rabinowitz, UBS head of direct execution services for Asia, said the A-share market is not MSCI-ready because investors cannot access broader sectors of the mainland’s equity market. They can invest in A shares through the Hong Kong-Shanghai stock link but these are heavily skewed toward the financial sector, he said in a teleconference.
Russell Rebalancing Will Bring Massive Buy Orders for 5 Key Stocks
24/7 Wall St.
With April coming to a close on Thursday, it is time for yet another rebalancing of some of the biggest indexes on Wall Street. At the close on Thursday, the Russell 2000 and the Russell 1000 will have enormous buy and sell orders hit the tape as the stocks in the indexes are rebalanced to represent the proper current weighting.
Comparing mutual funds and exchange traded funds
This look inside mutual funds and exchange traded funds shows how each of these investment types work, and how each of them handle risk.
Cinnober launches quality standard initiative for FinTech industry
Cinnober is launching an initiative intended as the cornerstone of a public, industry-wide framework for quality assessment of financial software and systems. To kick off the initiative, Cinnober Financial Technology is inviting influential players in the industry to participate in a working group, which is being convened in London on June 8.
Marketing Chiefs Need To Embrace Technology
We have grown so used to being interconnected, to having the means of communicating with other people or finding out information at the touch of a screen that it is hard to believe that when the current generation of senior managers were in the early stages of their careers Google, YouTube, Facebook and Twitter did not exist.
Twitter Troubles Lie in Marketers’ Reluctance to Buy New Kind of Ad
By VINDU GOEL and SYDNEY EMBER, NY Times
As a company, Twitter is an adolescent — gangly, starry-eyed, growing like a weed and unpredictable.
Goldman and IDG Put $50 Million to Work in a Bitcoin Company
By NATHANIEL POPPER, FT
Goldman Sachs is becoming the first major bank to make a significant investment in a Bitcoin-focused company, giving a vote of confidence to the embattled virtual currency.
Q&A: Twitter’s ‘leaked’ results
Philip Stafford, FT
So what happened with Twitter on Tuesday night?
The social media site fell victim to the speed of its own distribution when Selerity, an independent data gathering company, found Twitter’s earnings on Twitter’s investor relations website and broadcast it to the world — on Twitter.
Apple Said to Have Found Defect in Watch Part, WSJ Reports
Apple Inc. is said to have found a defect in a key component of its watch during production, forcing the company to limit supply of the new device, the Wall Street Journal reported, citing unidentified people familiar with the situation.
Numerix Signs Partnership deal with xQuant of Hangzhou China
Numerix CrossAsset Analytics Bring Powerful Pricing to xQuant’s Equity Derivatives Platform
Numerix, the leading provider of cross-asset analytics for derivatives valuations and risk management, and xQuant, a leading financial technology vendor in mainland China with particular focus on providing quantitative financial solutions for the greater China region, today announced the details of a new partnership agreement.
SEC Announces Insider Trading Charges Linked to China Tech DealSEC; Announces Insider Trading Charges Linked to China Tech Deal
By NED LEVIN, WSJ
SEC alleged two Beijing residents bought out-of-the-money call options before deal was announced. SEC alleged two Beijing residents bought out-of-the-money call options before deal was announced.
The U.S. Securities and Exchange Commission announced insider trading charges against two Beijing residents on Wednesday, alleging they purchased stock options ahead of Chinese e-commerce company 58.com’s purchase of a $1.6 billion minority stake in rival Ganji.com.
Allianz repays $1.4 million after overcharging customers
Approximately 20,000 customers have been refunded over $1.4 million by Allianz Australia Insurance Limited and Allianz Australia Life Insurance Limited.
Three charged with insider dealing
As part of an investigation by the Financial Conduct Authority Manjeet Singh Mohal (DOB: 03/04/1957), Reshim Birk (DOB: 18/11/1961) and Surinder Pal Singh Sappal (DOB: 19/08/1963) all of Southall, Middlesex appeared before Westminster Magistrates’ court in respect of offences of insider dealing, contrary to Sections 52(1) and 52(2)(b) of the Criminal Justice Act 1993.
Former Wickham Securities CEO charged
The former CEO of collapsed debenture issuer Wickham Securities Ltd today faced court charged with various offences, including fraud, following an ASIC investigation.
SEC Charges Santa Barbara-Based Hedge Fund Firm, Executives, and Auditor for Improper Expense Allocations
The Securities and Exchange Commission today announced charges against a Santa Barbara, Calif.-based hedge fund advisory firm and two executives involved in improper allocations of fund assets to pay undisclosed operating expenses. The SEC also charged an accountant who conducted the outside audit of misleading financial statements that the firm sent to investors.
Federal Court Orders North Carolina Resident James Harvey Mason to Pay a Civil Penalty and Restitution Totaling $5.5 Million for Commodity Pool Fraud
In a related criminal action involving the same conduct, Mason pleaded guilty in June 2014 and is awaiting sentencing
The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge C. Graham Mullen of the U.S. District Court for the Western District of North Carolina entered a Consent Order against Defendant James Harvey Mason of Graham, North Carolina, imposing a $1.67 million civil monetary penalty and restitution of $3.88 million in connection with off-exchange foreign currency (forex) commodity pool fraud in violation of the Commodity Exchange Act (CEA). The Consent Order also permanently enjoins Mason from further violations of the CEA, as charged, and imposes permanent trading and registration bans on him. Mason has never been registered with the CFTC in any capacity.
Environmental & Energy
EU nations agree carbon market reforms should start in 2019: sources
By Barbara Lewis and Susanna Twidale – Reuters
European Union member states reached a provisional agreement that carbon market reforms should begin on Jan. 1, 2019, at closed-door talks on Wednesday, paving the way for a further round of negotiations next month, diplomats said.
EU votes to scale back on biofuels linked to deforestation
By Jeremy Hance – Mongabay.com
The European Parliament voted overwhelmingly today on a new cap on biofuels derived from edible crops, which critics say not only compete with feeding a growing global population but also contribute to deforestation and release unacceptably high levels of greenhouse gas emissions.
G20 to probe ‘carbon bubble’ risks
The G20 countries are to officially investigate the financial risks posed by the so-called ‘carbon bubble’ to fossil fuel companies and investors.
Glencore takes a stand on its fossil fuel reserves
Neil Hume, Commodities Editor, FT
Ivan Glasenberg, the chief executive of Glencore, is rarely short of an opinion. So it was no surprise to see him tackle climate change and the subject “stranded assets” head-on this week.
Oil Prices Move Higher, U.S. Crude Trades at Year-High; Signs of slowing U.S. production boosts oil
By ERIC YEP, WSJ
Oil prices gained in morning European trade on Thursday, with U.S. crude trading at its highest level this year, extending overnight gains on signs of slowing U.S. oil production.
Japan’s Financial Services Agency: Publication Of “IFRS Adoption Report”
The FSA published “IFRS Adoption Report” on April 15, 2015.
“Japan Revitalization Strategy (Revised in 2014),” stated the following: “the Government will conduct a fact-finding survey and interviews to ascertain how companies that have voluntarily adopted IFRS overcame any challenges they faced during their transition to IFRS, as well as the advantages brought about by their shift to IFRS. It will then publish its findings from the above in the form of “IFRS Adoption Report (tentative name)” to serve as a useful reference for companies considering adopting IFRS.”
China Rethinks Safety Net for Its Banking System
By NEIL GOUGH, NY Times
When the United States started insuring customer deposits, the government wanted to instill faith in the country’s financial system, which had been broken by a string of bank runs and failures during the Great Depression.
SGX welcomes GCCP Resources to Catalist
Singapore Exchange (SGX) today welcomed GCCP Resources Limited (GCCP) to Catalist under the stock code “41T”.
SGX welcomes Boustead Projects Limited to Mainboard
Singapore Exchange (SGX) today welcomed Boustead Projects Limited to Mainboard, under the stock code, “AVM”.
Former Enemies Recall Vietnam War’s End With Eyes on Future
Vietnam’s Communist leaders commemorated the 40th anniversary of the end of their war against the U.S. with red-flag pageantry as the two countries forge closer economic and military ties against the backdrop of a more assertive China.
Venezuela in gold swap with Citi
Henry Sanderson, Neil Hume and Andres Schipani, FT
Venezuela has turned to Wall Street to help it secure US dollar funding through its large gold reserves as the country struggles with an economic crisis that has left it struggling to pay for essential items such as food, medicine and even toilet paper.
Bunge quarterly profit beats estimates
Bunge Ltd, one of the world’s largest agricultural trading houses, reported a better-than-expected quarterly profit, helped by strong margins from soybean crushing and oilseeds exports.
Aspectus appoints new Managing Director for North America
Aspectus, the global communications agency, has appointed Jed Hamilton as its new Managing Director for North America. Jed brings nearly 20 years’ marketing communications experience within the financial and technology sectors to the position. His background includes a mix of agency and in-house leadership roles, as well as time on the editorial side as a financial trade journalist.