First Read

Dark Pools Take Larger Share of Trades Even as SEC Scrutinizes
Sam Mamudi – Bloomberg
The rise of off-exchange trading in the U.S. stock market continues unabated even as regulators question the wisdom of allowing the shift to continue. Shares changing hands in private venues such as dark pools accounted for 40.4 percent of total share volume on June 10, according to data compiled by Bloomberg. That’s the most since 41.7 percent took place off-exchange on June 22, 2012.
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***JM: In the dark, sometimes it’s hard to know whether you’re finding problems or just stumbling around. Hi John! Yep, I snuck in a comment when Sarah wasn’t looking. Have fun in Omaha!

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What Drives the Revolving Door Between the Government and Wall Street?
Ryan Tracy – MoneyBeat – WSJ
Do government regulators go easy on Wall Street to secure themselves a high-paying job in the private sector? That debate, which has been raging for years and intensified after the financial crisis, often takes place in anecdotal terms. A new paper from the Federal Reserve Bank of New York seeks to inject more data into the discussion — and its findings suggest that the revolving door may be driven by an entirely different force.
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****SR: Hmmm….It seems to me that, either way, the revolving door is still a problem.

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Liffe Sets Daily Volume Record In MSCI World Euro Index Futures
Intercontinental Exchange, the leading global network of exchanges and clearing houses, announced today that Liffe reached a daily volume record of 205,570 contracts in MSCI World Net Total Return Euro Index futures on June 11, 2014. The previous record of 197,264 contracts was set on March 14, 2014.
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MarketsWiki World of Opportunity Summer Intern Series Goes to London
John Lothian & Co. is pleased to announce the MarketsWiki World of Opportunity Summer Intern Education Series is coming to London on July 1st and 2nd, 2014 with the generous support of the [[CME Group]].
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HFT, Fair & Balanced: An Academic and Historic Perspective
Ahmet Karagozoglu – TABB Forum
Electronic trading has transformed the capital markets, giving rise to algorithmic trading, direct market access and high-frequency trading. For better or for worse, it has been a natural evolution.
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****SR: Has anyone ever criticized electronic trading for being unnatural?

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TOCOM Deploys KVH’s Industry Leading Ultra-Low Latency Networks Between Tokyo And CME’s Data Center
KVH Co. Ltd., Asia’s leading information delivery platform headquartered in Tokyo, Japan, today announced that Japan’s major commodity exchange, Tokyo Commodity Exchange (TOCOM) has selected KVH’s Global Ether-WAN, the industry’s fastest global ultra-low latency networks, for its connection between TOCOM Tokyo proximity data center and the Chicago Mercantile Exchange Group (CME) data centers in Aurora and Cermak, Illinois.
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****SR: Chicago and Tokyo are now closer together…so why can’t I get from here to Japan without a 13 hour flight?

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U.S. Marshals to auction bitcoin seized in raid on Silk Road market
Reuters
The U.S. government plans to auction about 30,000 bitcoin, the electronic currency, valued at about $17.4 million, on June 27 the U.S. Marshals Service said.
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****SR: Hard to seize a bitcoin. They just go right through your fingers.

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MarketsWiki

MarketsWiki Page of the Day
Walter L. Lukken
jlne.ws/1oTLXbV

MarketsWiki Recent Updates

People

Walter L. Lukken; Russell R. Wasendorf Sr.; Elise Fleischaker; Aitan Goelman; John J. Mack

Companies, Organizations and Groups

NYSE Liffe U.S.; NYSE Euronext; NYSE Arca Options; BNP Paribas Group; Morgan Stanley; Financial Stability Oversight Council

Statistics

49,745,840 pages viewed, 7,967 articles, 183,645 edits
MarketsWiki Statistics

Lead Stories

SEC’s Stein Calls for Tougher Brokerage Rules
Andrew Ackerman – MoneyBeat – WSJ
U.S. securities regulators should increase the amount of cash and other assets Wall Street firms must set aside, a top regulator said Thursday, warning current levels may not be sufficient to withstand a financial crisis.
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Fed Nominees Lael Brainard and Stanley Fischer Pass Senate Vote
BINYAMIN APPELBAUM – NY Times
The Senate on Thursday brought the Federal Reserve Board a little closer to full strength, confirming Lael Brainard, a former Treasury Department official, to one of the three open seats by a vote of 61 to 31.
jlne.ws/1oW3GiX

BoE to lend to some shadow banks
Sam Fleming – Financial Times
The Bank of England has decided upon a significant extension of the range of institutions it is willing to lend to as it responds to the rise of shadow banking and the rapid evolution of the financial system.
jlne.ws/1ueqfPB

New Zealand set for equity derivatives launch
www.ftseglobalmarkets.com
The New Zealand Stock Exchange will launch an equity derivatives market next week, following a year-long consultation with market participants.
jlne.ws/1v9VzkX

Markets Are Restacking the Building Blocks of a Financial Crisis
WILLIAM D. COHAN – Dealbook – NY Times
If any of the ingredients that make up a new and powerful financial crisis are missing from the current commercial bouillabaisse, it is awfully difficult to discern just what they might be.
jlne.ws/1uelANE

BNP Executive Leaving Won’t Quell U.S. Penalty Demands
Fabio Benedetti-Valentini, Tom Schoenberg and Greg Farrell – Bloomberg
Georges Chodron de Courcel’s resignation after more than 40 years at BNP Paribas SA (BNP) won’t soften U.S. demands for a guilty plea and a $10 billion penalty from the French bank for sanctions violations, according to a person familiar with the matter.
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Regulatory

Banks’ Overseas Moves Should Get CFTC Investigation, Waters Says
Silla Brush – Bloomberg
Wall Street banks should face investigation over recent moves to escape U.S. rules for overseas derivatives trades, according to the top Democrat on the House Financial Services Committee.
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US and European regulators clash over cross-border rules
Joel Clark – Euromoney Magazine
A CFTC official frustrates European regulators at the IDX conference by suggesting futures clearing should migrate to the US to avoid a conflict between Dodd-Frank and EMIR.
jlne.ws/1ueip8x

Brokers Fight Rule to Favor Best Interests of Customers
TARA SIEGEL BERNARD – NY Times
Brokers are not necessarily required to act in their customers’ best interest, even if they are advising on their retirement money. While that would seem to be a basic consumer protection, in Washington and on Wall Street it has proved to be wildly contentious.
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Global Rules for Auditors? Don’t Hold Your Breath
FLOYD NORRIS – NY Times
Chris Cox, who as chairman of the Securities and Exchange Commission tried to bring international accounting rules to the United States, has now done an about-face.
jlne.ws/1oW3WPa

Benchmark Riggers to Face Jail in Planned U.K. Law Shift
Svenja O’Donnell – Bloomberg
Traders who manipulate currency rates or borrowing costs would face criminal charges under plans to be announced by Chancellor of the Exchequer George Osborne in a crackdown on bankers less than a year before a general election.
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SuperDerivatives: Asia favoured by OTC regulatory arbitrage
Luke Clancy – Risk.net
Asia-Pacific posited as an attractive location for OTC derivatives as the costs of doing business in the US and Europe begin to mount following regulatory intervention
jlne.ws/1uejEVp

Decision Near on Inclusion of LEI in Canadian Fixed-Income Data Repository
Michael Shashoua – WatersTechnology
IIROC, the Canadian self-regulatory organization, is expected to finalize Rule 2800C this summer, which could include the collection of legal entity identifiers in a fixed-income data repository.
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Federal Reserve Board Invites Comment On Proposal To Modify Regulations For Capital Planning And Stress Testing
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Remarks Before The Peterson Institute Of International Economics, SEC Commissioner Kara M. Stein, Washington, D.C., June 12, 2014
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Examples of good and poor practice in ‘Banks’ control of financial crime risks in trade finance
www.fca.org.uk
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Letter from the Chairman to the Chancellor on Senior Managers and Certificate Scheme: extension to foreign banks
www.fca.org.uk
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Annual Mansion House Speech By UK Chancellor Of The Exchequer, RT Hon George Osborne MP.
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SIFMA Statement On Announced Resignation Of Treasury Under Secretary For Domestic Finance Mary Miller
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Speech Given By Mark Carney, Governor Of The Bank Of England At The Lord Mayor’s Banquet For Bankers And Merchants Of The City Of London At The Mansion House, London, 12 June 2014
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Exchanges & Trading Facilities

Exclusive: CME sees no wheat convergence issue despite widening spread concerns
Reuters
CME Group has scrutinized trading in its wheat futures contract after receiving complaints that heavy last-minute spread trading could influence a hike in storage rates, but found no evidence that was the case, its top commodities researcher told Reuters.
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Euronext launches Spotlight Options in Amsterdam and Brussels
Euronext today announced that in July it will launch Spotlight Options, a segment dedicated to the development of new option classes requested by market participants, on its Amsterdam and Brussels derivatives markets.
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Elior lists on Euronext
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Euronext celebrates PSA Peugeot Citroën’s successful capital increase with bell ceremony opening trading on Euronext markets in Paris
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NZX: Equity Derivatives Strengthen NZ’s Capital Markets Offering
jlne.ws/1oWccP9

FMO Lists USD 500 Million Floating Rate Notes On Euronext Amsterdam
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Delta Lloyd lists EUR 750 million notes on Euronext Amsterdam
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Hedge Funds & Managed Futures

Hedge Funds Get Stung by Slow Markets
WSJ
Some of the biggest investors on Wall Street are losing money with wrong-way bets in markets around the globe, a surprising black eye amid a rise in stock and bond prices.
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Pine River joins hedge funds closing to new money
Stephen Foley in New York – Financial Times
Pine River Capital Management, the hedge fund group founded by Brian Taylor, is closing its flagship fund to new investors, joining a growing list of hedge funds returning cash or shutting their doors to new clients.
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Contenders jostle for Bond King’s crown
Stephen Foley and Michael Mackenzie – Financial Times
Jeffrey Gundlach, the founder of the bond fund manager DoubleLine Capital, opened his midyear webcast for investors this week with a disquisition on the history of the penny. Given a penny for their thoughts – as per the title of Mr Gundlach’s presentation – bond investors listening might also talk of rising powers and declining empires. Except they might be referring to the growing success of DoubleLine and the questions hanging over Bill Gross, the man who, for a generation, has been called the Bond King.
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Bain Capital’s Mark Nunnelly Retires
WILLIAM ALDEN – Dealbook – NY Times
Mark Nunnelly, a longtime managing director of Bain Capital, has retired from the Boston-based private equity firm, a person briefed on the matter said on Thursday.
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Permira closes fund V after nearly three years of fundraising
Alec Macfarlane – Financial News
Permira has held a final close for its fifth buyout fund at its revised hard cap of EUR5.3 billion, marking an end to nearly three years of fundraising for the global private equity firm.
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5 Things Investors Think About Private Equity
WSJ
Secondaries firm Coller Capital has released its biannual Private Equity Barometer, which aims to gauge investor sentiment towards the asset class. Private Equity News has sifted through the findings to deliver key takeaways from the survey, which included participation from 115 investors based in North America, Europe, the Middle East and Asia-Pacific.
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Marathon: expand hedge fund role in Europe’s capital markets
Luke Smolinski – Risk.net
Meet Marathon, the hedge fund that bought up toxic debts at the request of the US Treasury, and is now increasingly taking care of the distressed assets of European Union banks. Asset managers such as Marathon, which have acted as the sweepers and moppers of the financial system over the past few years, are likely to grow in size and sway if present trends continue.
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Banks & Brokers

TD Ameritrade Reveals Order-Routing Revenue
WSJ
TD Ameritrade Holding Corp. disclosed on Thursday the revenue it receives for routing trade orders to certain venues for execution. The disclosure comes as regulators step up scrutiny of the relationship between trading venues and high-speed traders.
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Barclays Poaches Antenberg Back From Deutsche Bank
Gillian Tan – MoneyBeat – WSJ
Barclays PLC, which has witnessed several high profile departures from its investment bank, has hired Gary Antenberg as a managing director and chairman of insurance in its financial institutions group.
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Transaction services guide 2014: The epitome of relationship banking
Laurence Neville – Euromoney Magazine
Relationship banking never died. The supportive role a bank plays in helping clients grow and develop has always been at the heart of transaction banking. Investment bankers could learn something.
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UBS Hires Veteran Bank of America Executive
MICHAEL J. DE LA MERCED – Dealbook – NY Times
UBS has hired Jerry Marcus, a former head of Bank of America Merrill Lynch‘s retail investment banking group, as a vice chairman for its Americas investment bank, the Swiss firm said on Thursday.
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BAML Hires Two in e-FICC
Profit & Loss
Bank of America Merrill Lynch (BAML) has made two senior appointments to its FICC electronic trading team
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Greece’s Alpha confirms purchase of Citibank’s Greek retail ops
Reuters
Alpha Bank, Greece’s fourth-biggest lender by assets, said on Friday it agreed to acquire Citibank’s retail banking operations in Greece at a price of 2 million euros ($2.72 million).
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Nomura hires ETF Securities Emea distribution head
Sarah Krouse – Financial News
Nomura has hired the head of distribution for Europe, the Middle East and Africa at ETF Securities as a managing director in its equities division, further building out the business in London.
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BoE to lend to some shadow banks
Sam Fleming – Financial Times
The Bank of England has decided upon a significant extension of the range of institutions it is willing to lend to as it responds to the rise of shadow banking and the rapid evolution of the financial system.
jlne.ws/1ueqfPB

Clearing & Settlement

Eurex calls for capital relief on segregated accounts
Cecile Sourbes – Risk.net
Regulators should provide a capital incentive for the use of segregated accounts in derivatives clearing, because they reduce risk if a member defaults, according to Matthias Graulich, global head of clients and markets at Eurex Clearing. The argument is that segregated collateral can be ported away from a stricken clearing member more easily, shrinking the amount of risk for which the firm is responsible.
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CME changes margins for agricultural products
Reuters
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Indexes & Products

How International ETFs Work
Joshua M Brown – The Reformed Broker
My friend Brendan Ahern of KraneShares has been working with me for almost four years now, helping us with our international stock exposures and portfolio holdings. Brendan’s got a new white paper out that explains this process along with an illumination of many commonly held misconceptions and fallacies surrounding ETF structure and mechanics.
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Message From Europe’s Exchange Traded Fund Providers, Users And Industry Participants To ESMA: Developing Europe’s Market Structure For Exchange Traded Funds – Key Principles For MiFID ‘Level 2’ And The Central Securities Depositary Regulation
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Technology

New Commodity Futures APIs from Barchart Simplify Access to Market Data
Barchart.com, Inc., a leading provider of market data and information, today announced the release of several new web services APIs made available through its Barchart OnDemand service. The new APIs are designed to serve the commodity futures industry including agricultural, energy, metals and softs markets.
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Trade without a network switch: reduce latency and jitter; increase your hit rate
xCelor LLC, a leading supplier of high-performance trading solutions based in Chicago is proud to announce its next-generation Layer 1 network switch, the xPort XPM2 (“XPM-Squared”). Adding to the xPort family of layer one switches, the XPM2 adds an FPGA to bring processing closer to the network. Like the existing devices in the xPort product family, the device can replicate market data to multiple servers in 2-4ns. Unlike existing Layer 1 offerings, servers can also talk back to the exchange through the device.
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Options and Velocimetrics Announce Partnership, Adding Real-Time Latency Monitoring To The Options’ Ultra Low Latency Platform
Options, the leading private financial cloud provider for the global capital markets industry, has today announced a partnership with Velocimetrics, the provider of comprehensive monitoring and performance analysis solutions.
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Kynetix, Contango Launch EMIR Data Matching Tool
Nicholas Hamilton – WatersTechnology
The TRAMS tool compares the unique trade identifiers and other data elements in the records held by trade repositories and market participants to ensure they are consistent
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Versteeg Leaves Asset Control for Broadridge
Nicholas Hamilton – WatersTechnology
After more than 10 years at Asset Control, Tim Versteeg has joined Broadridge as a senior sales director
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Enforcement

Dublin grows jittery over EU probe into ‘sweetheart’ tax deals
Vincent Boland in Dublin – Financial Times
The European Commission moved on Wednesday to launch a formal investigation into arrangements between Apple and the Irish tax authorities as part of a probe into “sweetheart” tax deals between some European countries and selected foreign companies. That is making the authorities in Dublin nervous.
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Goldman and Bain Quit the Private-Equity Conspiracy
Matt Levine – Bloomberg
Back in the mists of time there was a leveraged-buyout boom. It was a heady time for the private equity firms doing all the leveraged buyouts: They were all very busy, and they were all getting very rich. At some point they discovered a nice way to be less busy, and more rich. This was to avoid bidding against each other to buy companies. There were plenty of targets for everyone, and by not all chasing the same deals, they saved themselves some work and also avoided overpaying for the companies.
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Environmental & Energy

China’s Shenzhen to punish firms if carbon targets not met-media
Reuters
China’s Shenzhen will impose sanctions on companies that fail to comply with targets under the city’s carbon trading scheme, an official said according to a local media outlet, despite criticism about the rules.
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China’s Guangdong extends carbon deadline, plans new auction
Kathy Chen and Stian Reklev, Reuters
China’s Guangdong province has delayed a deadline for companies to hand over CO2 permits for 2013 emissions and plans an extra permit auction, the China Emissions Exchange said, after firms refused to buy permits in China’s centrepiece carbon trading scheme.
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***LB: Also in this story “The deadline delay from June 20 to July 15 will allow the government to make some adjustments to individual company targets.”

China Lets Carbon Programs Blossom, But Will They Take Root?
Gloria Gonzalez, Ecosystem Marketplace
China has in many ways become a beacon of hope for those who believe that carbon pricing can make a difference in forestalling catastrophic climate change.
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***LB: Also in this story “Despite implementing six pilot trading programs at lightning speed, however, China must contend with several obstacles before its carbon pricing agenda spreads across the country.”

Asia-Pacific

Taste for little luxuries suggest Japan’s tax rise hangover fading
Stanley White and Izumi Nakagawa – Reuters
Japan needs people spending with confidence if a radical strategy adopted by Prime Minister Shinzo Abe is to succeed in breaking the economy free of two decades of deflation and sub-par growth. Government data covering the period after the tax was increased to 8 percent from 5 percent at the start of April has begun to trickle in. Household spending and retail sales in April dropped the most in three years.
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Hong Kong’s financial hub braces for possible shutdown over protest
Reuters
Multinational companies and financial institutions in Hong Kong are drawing up emergency plans in the event of a partial shutdown of the financial hub’s business district this summer due to a planned pro-democracy protest.
jlne.ws/1uesOkL

Frontier Markets

Bob Diamond African venture misses $400m investment target
Javier Blas, Africa editor – Financial Times
Bob Diamond has failed to secure the additional $400m he was targeting for his African venture after some investors balked at the second fundraising in six months, according to two people familiar with the situation.
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In Emerging Markets, What Scares Most Investors Entices Oppenheimer
LANDON THOMAS JR. – Dealbook – NY Times
The day has been long for Justin M. Leverenz, who runs America’s largest emerging markets mutual fund at Oppenheimer Funds. He has been up since 4 a.m., poring over annual reports, racing through traffic to make company meetings and finally, in the soft air of an Istanbul evening, a bit of book browsing and pickle tasting in this city’s old European quarter.
jlne.ws/1uelMMA

U.K. Arranges Investor Meetings for Islamic Bond Issuance
WSJ
The U.K. government Friday took a big step towards becoming the first Western economy to sell Islamic bonds after it hired banks to arrange a series of investor meetings ahead of a deal.
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Kenya looking to clear first futures exchange by September
LeapRate
Financial derivatives, especially for interest rates and foreign exchange, are expected to be the front runners in the futures exchange as they do not require warehousing infrastructure to trade.
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Fitch Lowers South Africa Credit-Rating Outlook to Negative
Bloomberg
South Africa’s credit-rating outlook was cut to negative from stable by Fitch Ratings because of a deterioration in the country’s growth prospects.
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FMC exploring feasibility of common clearing corporation for commodity futures market
Economic Times
India’s decade-old commodity futures market, comprising five national and 10 regional bourses, may get a common clearing corporation that will reduce transaction costs for participants.
jlne.ws/1sbA4SJ

Egyptian Exchange: A New Deal Of Block Trading Worth LE 1.28 Billion On Amer Group Shares
jlne.ws/1ues7rw

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