First Read

Financial Reform Remains a Work in Progress
SIMON JOHNSON – NYTimes.com
Of all the arguments put forward by big banks and their allies in recent years against financial reform, the line that surfaced last week was arguably the most strange. Wall Street has been reformed, according to this view: There was a great battle, and we (the big banks) lost. There is, consequently, nothing more to do.
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***** Battles are won and lost, but the war continues; forever.

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AlphaMetrix: We did nothing wrong!
Ginger Szala & Edited by Kristin Fox | AllAboutAlpha
On Dec.24, 2013, AlphaMetrix Group stakeholders received a little present in their e-mail boxes. The email was sent through AlphaMetrix@gmail.com and not a corporate account: “Dear AlphaMetrix Group Stakeholder, We are very upset and disappointed by the terrible events that have unfolded at AlphaMetrix Group, LLC. This need not have happened. We deny any allegations of wrongdoing. “
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***** I believe a court of law will be the judge of this.

***** Former Futures Magazine’s Ginger Szala and Kristin Fox still working together?

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European companies struggle with derivatives reporting deadline
Carol Dean – Euromoney magazine
European companies are in danger of failing to comply with the new derivative reporting standards required under European Market Infrastructure Regulation (EMIR), one of the most challenging pieces of regulation companies are facing crunch time over.
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***** Get ready for the fines, boys.

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Sponsored Content
Derivatives trade reporting comes to Europe
The Depository Trust & Clearing Corporation (DTCC) has been at the forefront of the development of trade repositories, building global capabilities across the spectrum of asset classes. Today, our Global Trade Repository (GTR) operates, through locally-licensed DTCC subsidiaries, in three continents enabling users to meet their local regulatory reporting obligations in an open and cost effective manner. 45 regulators around the world use DTCC’s GTR as a tool to monitor the build-up of systemic risk in a timely and accurate manner.

Our European repository was approved by ESMA to collect data from entities with a reporting obligation in Europe on 7 November 2013, paving the way for the mandatory reporting of derivatives contracts beginning on 12 February 2014.

Timing is of the essence
The start of a reporting regime for all derivatives contracts across five asset classes, both OTC and ETD, in one single day will be a huge undertaking for the industry and its scale and implementation is unprecedented. It is important that firms that have experience of reporting in other jurisdictions as well as those that find themselves with a reporting obligation for the very first time, take into account the specific reporting requirements under EMIR and make provisions now in preparation for the trade reporting deadline.

When choosing which derivatives repository to report to, firms need to understand the business models of each, ensure their trade repository has knowledge of the local regulatory requirements and experience dealing with regulators. It is important to consider the economies of scale, the cost structure and the flexibility and choice of reporting and connectivity options available.

Our European repository provides a flexible and open platform supporting direct and delegated reporting. For further information about our services please contact: GTR-EMEA@dtcc.com or + 44 207 650 1545

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CME’s Kansas City Board of Trade Wheat Contracts Now Available in Aspect Enterprise Solutions’ Market Data Portal
The Kansas City Board of Trade contracts (KCBT) from CME Group are now available in AspectDSC, the Cloud-based market data and analytics portal from Aspect Enterprise Solutions. KCBT’s key benchmarks are the Hard Red Winter Wheat (KC HRW) and Wheat Spread Synthetic contracts which are used by agricultural commodity producers and merchandisers to provide price risk management. Hard Red Winter wheat is the principal ingredient of bread.
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***** Wheat in the cloud. Who ever imagined?

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Investors turn to virtual ‘Warren’ tool for complex answers
Arash Massoudi in New York – FT.com
Forecasting the market impact of a catastrophic US hurricane or an explosion in a Middle Eastern country usually requires serious time and brainpower. Now a group of trading technology executives has teamed up with former Google engineers and entrepreneurs to create a “virtual market assistant” – like Apple’s Siri, but for investors – that they claim will answer complex financial questions about global events instantaneously.
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***** Buy the rumor, sell the fact might just get lost here.

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10 Reasons Why CFTC-Imposed Position Limits Will Affect Swaps End Users
Sidney Jacobson – TabbFORUM
Many swap end users assumed they would be exempt from CFTC position limits because most of their transactions would qualify as bona fide hedges. Based on the most recent CFTC proposals, however, they were wrong.
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***** Bona fide is not what it used to be.

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Sebi international conference on algo trading next week
Business Standard
Market regulator Securities and Exchange Board of India (Sebi) will hold a two-day international conference on high frequency trading (HFT) and algo trading next week. The conference will be attended by experts and regulators from foreign countries including US, Spain Japan and Australia.
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***** They are behind before they even started.

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The mountain without Mohamed
Dan McCrum | FT Alphaville
So Mr El-Erian will (co-)head Pimco no more, in a move that appears to have surprised most people inside and outside of the Newport Beach based bond behemoth. What follows is informed speculation, without input from a man who has been kind enough to use us as one outlet for his prolific output of commentary. But to us it looks like he has paid the price for Pimco’s recent investment record, and that says a great deal about the situation in which Pimco now finds itself.
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***** Change the story exercise at Pimco.

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xCelor launches deterministic Layer 1 network switches with port-to-port latency of 2-4ns
xCelor LLC, a leading supplier of high performance trading solutions based in Chicago is proud to announce that its xPort Series of Layer 1 network switches are available for immediate delivery. The launch is significant because it further reduces inbound market data latency by cutting out the unnecessary processing employed by the full-service switches typically used in datacenters today. The xPort switch simply replicates data, as quickly as possible, from one exchange handoff to multiple servers. As well as reducing latency to the absolute minimum, the removal of the processing element greatly increases determinism – which can make or break a latency-sensitive trading strategy.
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***** This is cool stuff. We are hoping to catch Robert Walker for an interview about this in the next week or 2.

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MarketsWiki

MarketsWiki Page of the Day
Mohamed A. El-Erian
jlne.ws/dY6z0J

MarketsWiki Recent Updates

People

Marianne Brown; Mohamed A. El-Erian; Atsushi Yoshikawa; Michael Gorham; Eric Vincent

Companies, Organizations and Groups

Nomura Group; Fidessa group plc; International Derivatives Clearing Group, LLC

Miscellaneous

Buyouts; Job Postings

Statistics

46,703,894 pages viewed, 7,778 articles, 177,151 edits
MarketsWiki Statistics

Lead Stories

Euronext sees regulatory backing for spin-off in Feb
Reuters
Pan-European financial market operator Euronext aims to get regulators’ backing for its spin-off from NYSE Euronext this or next month, its CEO said on Wednesday.
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Bloomberg Leads SEF Market Share
Markets Media
Bloomberg has jumped to an early lead in the SEF sweepstakes, capturing an 85% market share across all asset classes for dealer to client swap execution facilities, according to data from Clarus Financial Technology.
jlne.ws/1eUZhFU

Exporting U.S. Rules for Foreign Banks
NYTimes.com
One of the biggest loopholes on Wall Street may soon close. More than three years ago, Congress passed a sweeping overhaul of the financial system that was supposed to leave no big bank untouched. Staggeringly, though, half of the large banks on Wall Street are able to avoid crucial parts of the overhaul — simply because they are foreign.
jlne.ws/1eUZhFW

At Davos, Debate on Whether Banks Have Learned Their Lessons
NYTimes.com
Paul Singer, the founder of the hedge fund Elliott Management, said on Wednesday that he remained skeptical that the financial markets were safer despite the changes enacted in the banking industry and by regulators after the financial crisis.
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Every silver lining has a cloud for Davos business elite
Andrew Hill and Gillian Tett in Davos – FT.com
Executives attending the World Economic Forum are without doubt more confident about the economic outlook than they have been since the financial crisis erupted in 2007-08. But do not underestimate the ability of the Davos business elite to find new things to worry about.
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2 Wall Street Moguls Champion Gay Rights
MICHAEL J. DE LA MERCED – NYTimes.com
When the World Economic Forum made “inclusiveness” one of its pillar themes, it was safe to assume the assembled corporate leaders would discuss economic issues. But two of the busiest activist hedge fund managers on Wall Street spent 90 minutes on Thursday morning debating the state of gay, lesbian and transgender rights with an international array of activists
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UK’s European court blow to shape Libor supervision
Reuters
Britain’s defeat in the European Union’s top court over short-selling rules strengthens the case for EU-level supervision of market benchmarks like Libor, lawmakers said on Thursday.
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U.K. Exchange to Allow Trading in Ven
Neelabh Chaturvedi – MoneyBeat – WSJ
The growing interest in digital currencies already has tax authorities in the U.K. interested. Now a British regulated exchange will allow members to trade Ven, a digital currency that is based on a basket of currencies and commodities.
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Regulatory

We’ll Connect to Only Five or Six SEFs, Say Buy-Siders
Jake Thomases – WatersTechnology
If the two buy-side representatives from a Tabb Group conference panel are typical, then firms are not interested in connecting to all 22 swap execution facilities (SEF) on the market. Speakers from Babson Capital Management and Vanguard Group said they had significantly narrowed down the list of SEFs their companies would be trading on.
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Survey Highlights Companies’ Uncertainty
Thomson Reuters, the world’s leading source of intelligent information for businesses and professionals, today announced the findings of a new survey which shows that although conduct risk has become one of the highest priorities for regulators worldwide, there is still great disparity in how firms are defining conduct risk and similarly how regulators are referring to the concept.
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Exchanges & Trading Facilities

London Stock Exchange Income Rises 48%
WSJ.com
A surge in the number of companies going public helped boost London Stock Exchange Group PLC in the third quarter, with the company reporting a sharp rise in income for the period Thursday.
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London Stock Exchange Group Plc Interim Management Statement For The Period To 22 January 2014, Including Revenues And KPIs For The Three Months Ended 31 December 2013 (Q3)
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EEX And CLTX Creating A Combined Global Offering
The European Energy Exchange (EEX), the leading Energy Exchange in Europe, and Cleartrade Exchange (CLTX), a Singaporean Futures Exchange founded in 2010, have joined forces to create a unique global offering in the commodities sector. The acquisition, completed in December 2013, has already resulted in a combined group with over 300 members and 10 major asset classes.
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Irish Stock Exchange initiative could be a flyer
By Joe Gill | Irish Examiner
“Build it and they will come” is a mantra that could apply to an initiative by the Irish Stock Exchange this week. With the support of Boeing it has set out its ambition to become a more significant player in the fast moving aircraft leasing industry. Its statement coincides with two major air finance conferences being held in Dublin that brings together over 1,000 delegates from airlines, lessors and bankers.
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Hedge Funds & Managed Futures

Fidelity asset head O’Hanley to step down after cautious reign
Reuters
Fidelity Investments’ asset management head, Ron O’Hanley, will leave the company at the end of February, executives said on Wednesday, after a cautious stint running a key unit of the family-controlled business coming out of the financial crisis.
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Former NYSE Euronext Jan-Michiel Hessels chairman joins General Atlantic
Dan Dunkley – Financial News
The former chairman of stock exchange NYSE Euronext has joined private equity firm General Atlantic as a special adviser.
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Bond Battles: Pimco’s Struggles Highlight BlackRock’s Stability
Maureen Farrell – MoneyBeat – WSJ
Pacific Investment Management Co., the world’s largest bond-fund manager, and BlackRock, the world’s largest asset manager, have long drawn comparisons to one another. But recently the two have appeared to have diverged with Pimco stumbling and BlackRock on a roll.
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As a Money Manager, El-Erian Stumbled Last Year
Min Zeng – MoneyBeat – WSJ
While Mohamed El-Erian was widely known as a commentator on monetary policy and the global economy, his track record managing money at Pacific Investment Management Co. was not as distinguished.
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V2 Capital Announces $200 Million Investment in the V2 Hedged Equity Strategy
V2 Capital, an SEC-registered investment advisor, received a $200 million dollar allocation from a Fortune 500 insurance company to the V2 Hedged Equity Strategy, the firm announced today. The investment was allocated during the fourth quarter of 2013 and is now fully deployed in the Strategy.
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Berkshire Is Said to Face Start of U.S. Systemic-Risk Scrutiny
Ian Katz, Zachary Tracer and Noah Buhayar – Bloomberg
Regulators are starting to scrutinize Warren Buffett’s Berkshire Hathaway Inc. to determine whether it is important enough to the financial system to require Federal Reserve supervision, according to two people with knowledge of the matter.
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Future of multi-asset strategy firms brighter as QFS’ single-asset fund sinks
Simon Watkins – Euromoney magazine
In a trading world in which a broader policy mandate for central banks is firmly in operation, and where risk appetite is in decline, the failure of another single-strategy fund from QFS Asset Management highlights why multi-strategy funds appear to be the way forward.
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Investor requests to exit hedge funds fall in January
Reuters
Hedge fund investors withdrawal requests in January were for a lower amount than last month, new data showed on Wednesday, as more clients stuck with their managers to navigate financial markets in the coming year.
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Goldman steers clients to ‘3 pct funds’ in Volcker rule compliance
Reuters
Goldman Sachs is expecting to steer clients toward so-called “3 percent funds” as it takes aim at its large private equity business, with about $15 billion in assets on its balance sheet that come under Volcker Rule requirements.
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Pimco’s Bill Gross Seeks Push Beyond Bonds
WSJ.com
A day after his partner at the top of Pacific Investment Management Co. stepped down, Bill Gross said he wants to double down on its efforts to turn into much more than a bond shop.
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NewAlpha earmarks E30m for Rcube investment
Harriet Agnew – Financial News
An initiative to help fledgling French asset managers – both at home and abroad – set up in the country has signed a seeding deal with a Paris-based global macro manager.
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Banks & Brokers

Libyan Sovereign-Wealth Fund Sues Goldman Sachs
Liz Rappaport And Justin Baer – WSJ.com
Libya’s sovereign-investment fund sued Goldman Sachs Group Inc. GS +0.28% over trades that soured during the financial crisis, escalating a dispute between the firm and a high-profile client.
jlne.ws/1eUZkla

New Banking Cops Assigned to the J.P. Morgan Beat
MoneyBeat – WSJ
The top federal examiners in charge of overseeing J.P. Morgan Chase & Co. recently left their posts, putting new cops on the beat at a time when the biggest U.S. bank is under heightened regulatory scrutiny and trying to reestablish trust with its overseers.
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Wells Fargo Sells Servicing Rights on $39 Billion in Mortgages
MICHAEL CORKERY – NYTimes.com
In another sign of the banking industry’s retreat from the mortgage market, Wells Fargo is selling servicing rights on $39 billion of home loans to a nonbanking firm.
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Credit Suisse may agree $800 million U.S. tax settlement by July: WSJ | Reuters
U.S. authorities and Credit Suisse could agree a settlement of more than $800 million by July for the Swiss bank’s role in helping wealthy Americans dodge taxes, the Wall Street Journal reported on Thursday, citing unnamed sources.
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Santander says will increase U.S. business equity by up to $2 billion
Reuters
Spain’s Santander said on Thursday that it intended to increase the equity of Santander Holdings USA – which houses its U.S. banking and consumer finance businesses – by up to $2 billion.
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Most JPMorgan employees get no raise as legal bills mount -source
Reuters
JPMorgan Chase & Co (JPM.N) is telling employees this week about their 2013 bonuses, and most workers are not getting pay increases for the year thanks to the bank’s massive legal bills, a person familiar with the matter said.
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JPMorgan CEO Dimon says government cases against company were ‘unfair’
Reuters
JPMorgan Chase & Co Chief Executive Officer Jamie Dimon said on television on Thursday that government legal actions that the company settled for more than $13 billion were “unfair.”
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Clearing & Settlement

Traiana connects to first trade repositories for EMIR reporting
Traiana, the leading provider of pre-trade risk and post-trade processing solutions, announces it will provide connectivity to four trade repositories (CME, DTCC, Regis-TR, UnaVista) at the time of the EMIR deadline through its Harmony TR Connect trade reporting service.
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New DTCC White Paper Reveals Critical Need For Market Infrastructure Solutions To Meet Rising Collateral Demand
The Depository Trust & Clearing Corporation (DTCC) today cautioned that financial firms could face significant cost, risk and operational challenges managing margin requirements in the years ahead and called for collaborative solutions that leverage market infrastructures to help the industry meet increasing demands.
jlne.ws/1eUZkBD

CME Group Clearing: NYMEX Options Expiration Operational Procedures for the Trading Floor and Clearing Members (6U, CPE, ERO, PCL, RUE) Effective Wednesday, January 22, 2014
jlne.ws/1dy5hll

CME Group Margins: Performance Bond Requirements: New CBOT Products- Effective Friday, January 24, 2014
jlne.ws/1iqbwQa

Indexes & Products

Euronext announces 2013 performance of indices and yearly recap
Euronext N.V., a wholly owned subsidiary of IntercontinentalExchange Group, today announced the 2013 performance of its benchmark indices and annual recap. Highlights include 56 new proprietary indices launched, a significant increase in the number of outstanding Exchange Traded Products (ETPs) linked to Euronext indices and the best performance of Euronext’ Blue Chips indices since 2009.
jlne.ws/1eUZid4

Oslo Børs Burgundy – Introduction Of Two New Automatch Segments For Exchange Traded Products
jlne.ws/1eUZkBH

S&P GCC Composite Shariah Dividend Index Launched By S&P Dow Jones Indices
jlne.ws/1eUZkRX

Technology

SMA Launches Social Media Analytics for Active Traders
Max Bowie – WatersTechnology
Social Market Analytics, a Naperville, Illinois-based provider of trading signals based on social media sentiment, has released three new products aimed at active traders, in addition to its existing SmartStation workstation product for institutional clients and its free end-of-day report dubbed The Closing Edge.
jlne.ws/1eUZl8u

ISDA Publishes Recommendation For FpML Version 5.6
jlne.ws/1eUZl8v

55th UK firm signs for REPORTER EBA Common Reporting / CRD IV solution
Lombard Risk Management plc, a leading provider of integrated regulatory reporting, compliance and collateral management solutions for the financial services industry announces 55th UK firm selects REPORTER to meet EBA Common Reporting / CRD IV regulatory demands.
jlne.ws/1hOaDON

FX Transparency Launches TCA Analytics Application
FX Transparency, the largest independent provider of FX transaction cost analysis and best-execution consulting globally, today announced the release of FXT Analytics, a hosted application that will allow clients to create their own custom reports as well as explore new ways to reduce trading costs.
jlne.ws/1l19Ka9

Enforcement

Details Slip By Insider Trial’s Main Witness
MATTHEW GOLDSTEIN and ALEXANDRA STEVENSON – NYTimes.com
Dr. Sidney Gilman, the government’s most important witness in the insider trading trial of Mathew Martoma, a former SAC Capital Advisors portfolio manager, showed signs of a faulty memory on the stand on Wednesday.
jlne.ws/1eUZl8y

Former Oppenheimer Fund Manager Agrees to Settle Fraud Charges
The Securities and Exchange Commission today announced that a former Oppenheimer & Co. portfolio manager has agreed to be barred from the securities industry and pay a $100,000 penalty for making misrepresentations about the valuation of a fund consisting of other private equity funds.
jlne.ws/1eUZl8C

Mortgage Lawyer Puts Government Settlements on Her ‘Radar’
Al Yoon – MoneyBeat – WSJ
The Texas lawyer helping some of the biggest investors extract their pound of flesh from banks over faulty mortgage securities sees another problem for her clients: the government.
jlne.ws/1eUZl8G

Tourre Seeks Leniency in S.E.C. Case
NYTimes.com
Fabrice Tourre’s Wall Street career is over. But now that he faces an unusually stiff financial penalty for his role in creating a soured mortgage deal at Goldman Sachs, Mr. Tourre is fighting back.
jlne.ws/1eUZl8H

UK’s Financial Conduct Authority Fines Standard Bank PLC £7.6m For Failures In Its Anti-Money Laundering Controls
jlne.ws/1eUZl8I

Environmental & Energy

EU scales down 2030 climate and energy goals
Reuters
The European Union scaled back its long-term climate and energy ambitions on Wednesday, proposing less stringent targets than in the past, because of tougher economic conditions and the need to curb rising energy costs.
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New EU climate targets ‘weaken renewable energy goals’
Financial Times
The stringent renewable energy targets that have helped wind turbines and solar panels blossom across Britain face an uncertain future under a landmark set of EU climate and energy measures were unveiled on Wednesday.
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Q&A: EU’s 2030 climate and energy targets
Financial Times
What are the EU’s 2030 climate and energy targets and why are they important?
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Asia-Pacific

S.E.C. Judge Censures China Firms Over Audits
NYTimes.com
A U.S. judge has ruled that the Chinese units of the Big Four accounting firms should be suspended from practicing in the United States for six months, an escalation in a long-running dispute between regulators in the United States and China over access to audits.
jlne.ws/1eUZl8K

How the Big Four Audit Firms’ Chinese Units Ended Up in Court
Michael Rapoport – MoneyBeat – WSJ
The Securities and Exchange Commission’s dispute with the Chinese units of major global audit firms, culminating in an administrative law judge’s ruling Wednesday, has its roots in a wave of alleged accounting improprieties at U.S.-traded Chinese companies in recent years.
jlne.ws/1eUZkS9

Japan Exchange group to host RI Asia 2014 Conference (JPX Website)
Japan Exchange Group, Inc. (JPX) is proud to be hosting Responsible Investor’s third annual “RI Asia” conference at the Tokyo Stock Exchange on 5th & 6th March 2014.
jlne.ws/1eUZl8L

Shenzhen Stock Exchange Releases 2013 Self-Regulatory Report
jlne.ws/1eUZloZ

Frontier Markets

Analysis: Davos bosses tread warily in rocky emerging markets
Reuters
Multinational companies are becoming more picky about emerging market investments as slowing growth in upstart economies and a recovery in the West takes the shine off a previous sure-fire strategic bet.
jlne.ws/1eUZkSd

Brazil assets held by foreigners lose $285bn in three years
Jonathan Wheatley – FT.com
Nearly $285bn has been wiped off the value of Brazilian assets held by foreign investors during the past three years as the country struggles to regain the fast growth it saw before and immediately after the global financial crisis of 2008-09.
jlne.ws/1eUZnNC

Third time lucky for India interest rate futures market
Justin Lee – Risk.net
The relaunch of the exchange-traded interest rate futures market in India will be successful the third time around as regulators have listened to market feedback and approved a cash-settled product linked to a single bond underlying, say market participants.
jlne.ws/1eUZlp1

Nigeria Bourse CEO Says Close to Hiring Advisers for Share Sale
Lyubov Pronina and Chris Kay – Bloomberg
The Nigerian Stock Exchange is close to hiring external advisers as it prepares to distribute shares to its members and hold an initial public offering, said Chief Executive Officer Oscar Onyema.
jlne.ws/1eUZnNI

Zambia faces 8.5% yield for Eurobond – analyst
Kanika Saigal – Euromoney magazine
Zambian policymakers are poised to tap the international market for a second time, but they cannot expect similar terms set in the 2012 issue.
jlne.ws/1eUZnNJ

JSE Welcomes New Dubai Based Equity Member
The JSE has welcomed Arqaam Capital, a specialist emerging markets investment bank headquartered in Dubai, as its newest equity member.
jlne.ws/1eUZnNN

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