First Read

Chain, chain, chain
By Jim Kharouf, JLN

Today, like most days lately, is mostly filled with talk of blockchain. This topic continues to gather great interest and attract quite a bit of investment. Yesterday, the Depository Trust & Clearing Corp. held its first symposium on blockchain technology. An audience poll asked the question “If you had $10 million to invest in one of the following, which would you pick?” Coming in second was blockchain with 19 percent of the votes, lagging behind the other big topic in the industry, cybersecurity with 34 percent, according to the Wall Street Journal’s coverage of the event.

On top of that, DTCC announced a deal to work with Digital Asset Holdings on a blockchain initiative for repos. (See the coverage below.)

This topic is on the minds and on the priority list of most, if not every exchange in the industry. ICE CEO Jeff Sprecher talks about it in his interview with John Lothian News in our 2016 CEO Series below and garnered a mention from Phupinder Gill, CEO of CME Group in his interview

And Patrick Byrne, Overstock.com founder, was one of the keynote speakers at the FIA Boca conference this month. In 2014, Overstock made a big splash when it began accepting bitcoin as payment, and is now working on t0.com, a blockchain-based stock exchange.

Blockchain is everywhere at the moment and it is doubtful, at this juncture, that it is a passing fad. It’s more likely the most transformative technology to hit the industry in modern times. But getting there will not be a straight line. There will be false starts, some barking up the wrong trees, malinvestment and overinvestment – just like the internet, the airplane and countless disruptive technologies of the past.

2016 Exchange CEO Series: Jeff Sprecher Talks Data, Clearing and Growth for ICE
JohnLothianNews.com

For the Intercontinental Exchange (ICE), 2015 was about major investments in data and analytics services. Now in 2016, the exchange is looking to integrate recent data acquisitions into its business and grow well beyond traditional exchange trading and clearing services.

ICE CEO Jeff Sprecher spoke with John Lothian News at the FIA Boca Conference about how its purchases of SuperDerivatives, Interactive Data and S&P Analytics fit into its business model. ICE is also working with Blackrock, on exchange traded funds, to become its benchmark index provider.

“We started to pivot the company to get deeper into the data space,” Sprecher said. “We want to articulate a vision on how exchanges and data can come together into one holistic business that can serve customers.”

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Americas Trading Group Joins with Fidessa to Offer Brazilian Algorithms to a Global Audience Press Release
Americas Trading Group (ATG) today announced a new alliance with Fidessa Group Plc (LSE: FDSA), the award-winning sell-side equities trading platform provider. The new collaboration provides Fidessa OMS and connectivity network users with access to ATG’s highly specialized algorithmic trading models in the Brazilian market, which are locally hosted in Equinix data centers, close to the BM&F BOVESPA exchange in São Paulo.
goo.gl/SqicUA

***DA: Fidessa and Dilma Rousseff keeping Brazil on the top page of the news

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NYSE’s Head of ETFs, Bonds and Options Is Leaving Company
By Annie Massa – Bloomberg
NYSE Group Inc.’s head of exchange-traded products, bonds and options, Steve Crutchfield, plans to depart the company for a trading firm in Chicago, according to an internal memo obtained by Bloomberg.

***DA: As of publication time, the link was not available. We will re-post and tweet when the time comes. In the meantime, take a look at Crutchfield’s MarketsWiki Education presentation, How to Build an Options Trading Program (in Under Ten Minutes)

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Prominent MIT economist and dean Lester Thurow dies at 77
MIT
Scholar and public intellectual examined globalization and its consequences.
Lester Thurow, whose work addressed the many consequences of an increasingly global economy, died on Friday at his home in Westport, Massachusetts. Thurow, who also served as dean of the MIT Sloan School of Management, was 77 years old.
goo.gl/VOTAfA

***DA: As a young student of economics in the ’80s, I was fortunate to have been in the audience during one of Thurow’s speeches. I remember him as a man who cut through the politics to demonstrate the positives and negatives of globalization. He taught me the importance of a life-long commitment to education because, in the future, we would be constantly fighting obsolescence, ever in danger of being replaced by machines or lower-cost manufacturers. He was right.

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Like Oil and Water: A Tale of Two Economists
By LOUIS UCHITELLE – NY Times
THEY have met only once since Paul Krugman returned last summer to the prestigious economics department at the Massachusetts Institute of Technology. It was a brief, accidental encounter among the file cabinets and secretaries’ desks near Lester Thurow’s office. ”We exchanged pleasantries,” Mr. Thurow said. ”He was telling someone about a trip he had made to the far south of Argentina, and I listened politely.”
goo.gl/17pn1b

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Remarks By Leo Melamed at the Chinese Annual Conference at BOAO
LeoMelamed.com
As everyone is well aware the world is experiencing some difficult economic times and volatile markets. And the prospect for near term change is doubtful.
goo.gl/wkvleF

***** Leo was on the road again.

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Famed Trader Blair Hull on Data Analytics, Investing, and Black Monday – Podcast
By PAUL VIGNA – WSJ
Blair Hull stood in the trading pits of the Chicago Board of Trade on Oct. 19, 1987, and made the trade that would define his career. He bought at virtually the bottom on Black Monday, and made a tidy fortune in an afternoon. It’s a famous example of market timing, one that was completely manual. Today he does his market timing with powerful computers and advanced analytics.
goo.gl/6DvhX4

**** Our 16th floor neighbor gets around.

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Billionaire Koch Brother Will Sell 20,000 Bottles of Wine; All this can be yours for $15 million.
James Tarmy – Bloomberg
On May 19, 20,000 bottles of wine from William Koch’s cellar will go to auction at Sotheby’s. The blockbuster sale, spread across three days (May 19 – 21), represents close to half of the billionaire’s total collection and was acquired over the course of nearly 40 years.
goo.gl/RiRwlD

***** This is like Warren Buffett selling the shares of companies he has bought. He only bought things he liked, except it is hard to drink a railroad.

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Former TV Commentator Settles Penny Stock Fraud Charges
SEC
The Securities and Exchange Commission today announced that a former market analyst and TV news commentator has agreed to settle charges that he and his company fraudulently promoted a penny stock to investors.
/goo.gl/XLwCtW

***** Not even the FOX News commentator I expected. See the Reuters story here.

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These were the gadgets of the ’80s Wall St. banker
by Jack Regan – Money.cnn.com Video
From the ‘brick’ phone to the fax machine, we take a look at cutting-edge tech of the 1980s.
goo.gl/5MPwMc

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Tuesday’s Top Three
Sitting atop the leaderboard on yesterday’s click count was Bloomberg’s Gatsby-esque story Banker Accused of $25 Million Fraud Arose From a Gilded Legacy. Coming in a close second was Goldman Sachs and Bear Stearns: A Financial-Crisis Mystery Is Solved, WSJ’s account of the last days of Bear Stearns, as the investment bank suddenly found itself unable to obtain short term funds via the repo market. In third place was Jeff Sprecher’s contribution to our CEO series shot at the FIA Boca conference which, if you missed it, click on Mr. Sprecher’s face above.

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MarketsWiki Spotlight
IOMA: WFE’s Clearing & Derivatives Conference, 17-19 April, Kuala Lumpur, Malaysia

The World Federation of Exchanges represents 64 regulated exchanges across the world, and acts on behalf of a total of 99 organizations including affiliate members and clearinghouses.

WFE-IOMA 2016

The WFE’s IOMA conference brings together clearinghouses, exchanges, regulators and other stakeholders from around the world to discuss the key market structure and business issues of the day. The focus of the 2-day annual conference is post-trade and derivatives market issues. For more on the WFE, visit its page in MarketsWiki HERE

“Company Spotlight”
is brought to you by:
MarketsWiki

 

Lead Stories

Exchanges Condoned Alleged Spoofer’s Trades, Ex-Partner Says
By Matthew Leising -Bloomberg
Edwin Johnson, who co-founded 3Red Trading LLC, is locked in a legal dispute with Oystacher over terms of his departure from the firm. In a court filing this month in that litigation, Johnson described meetings he had with FBI agents in 2014 about his partner’s trading. He told those agents that CME Group Inc. Executive Chairman Terry Duffy and David Goone, the chief strategy officer of Intercontinental Exchange Inc., and two others had given him “false assurances” that “Oystacher’s trading practices were legal and legitimate.”
bloom.bg/22YgZlO

Wall Street Goes Big on Bitcoin Tech
By TELIS DEMOS – WSJ
The mainstreaming of bitcoin tech continues.
Nearly 500 suit-clad Wall Streeters, regulators, professors, and tech execs gathered at the Depository Trust & Clearing Corp.’s attended first ever single-issue public symposium, on blockchain, Tuesday in midtown Manhattan. Earlier Tuesday DTCC, the bank-owned utility for settling trades, also announced its first test of an application of blockchain, for repo trades. Matt Harris, of Bain Capital Ventures, said he had never seen such high-powered talent drawn to back end of bank technology in his 20 years in the space.
goo.gl/3NqrBG

Blythe Masters Cuts Deal: Digital Asset And DTCC To Develop Distributed Ledger Solution To Drive Improvements In Repo Clearing
Blockchain News
The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, and Digital Asset Holdings (Digital Asset), a software company that builds distributed, encrypted straight through processing tools, today announced plans to develop and test a distributed ledger based solution to manage the clearing and settlement of U.S. Treasury, Agency, and Agency Mortgage-Backed repurchase agreement (repo) transactions. Repo agreements were selected for this proof of concept because there is an opportunity to streamline how these products are cleared, as repo transaction volumes continue to grow.
goo.gl/KbZW6S

**The full DTCC press release: DTCC and Digital Asset to Develop Distributed Ledger Solution to Drive Improvements in Repo Clearing – http://goo.gl/WEpSc2

Blythe Masters Firm Gets Foothold in Repo Market With DTCC Deal
Bloomberg Business
Digital Asset Holdings, the blockchain startup run by ex-JPMorgan Chase & Co. executive Blythe Masters, has found a new foothold in finance, with the world’s largest securities settlement and clearinghouse agreeing to an experiment using its technology.
bloom.bg/1Urr60W

Cut-off for ICE LSE bid moved to “late April”
Futures & Options World
The deadline for US exchange giant the Intercontinental Exchange to submit a rival bid for the London Stock Exchange has been pushed to late April after the group confirmed earlier this month that is considering a bid for the firm. According to sources familiar with the matter, the deadline has been pushed to the end of April, giving ICE around six weeks to make an offer, after the LSE and German giant Deutsche Boerse confirmed that they had agreed terms to merge two weeks ago, less than a month after the exchanges said that they were in talks.
goo.gl/0i2sBx

Australia to end ASX clearing monopoly
Jamie Smyth in Sydney – FT
Canberra is ending the Australian Securities Exchange monopoly on equity clearing and relaxing ownership restrictions in a decision that removes a potential hurdle to the ASX’s participation in overseas mergers.
goo.gl/QqqTHa

Bats Global Markets to Acquire ETF.com, Broadening Content Offerings for Issuers, Brokers and ETF Investors; Transaction Expected to Close April 1st
BATS
Bats Global Markets, the leading exchange operator for the trading of exchange-traded funds (ETFs), and creator of the Bats ETF Marketplace, signed a definitive agreement to acquire ETF.com, a leading provider of ETF data, news and analysis.
goo.gl/h7uVNV

Louis Bacon Foundation Says It Was Duped by PJT’s Caspersen
Foundation says it alerted PJT Partners to irregularities; Prosecutors accused Caspersen Monday of stealing $25 million
The charitable foundation of hedge-fund billionaire Louis Bacon said it fell victim to Andrew Caspersen, the Wall Street banker accused of stealing $25 million in an investment scam.
goo.gl/9H3GFe

****** Fraud can happen to sophisticated investors too. They are just normally better at covering it up so as not to expose how stupid they were.

Switzerland: Rebuilding the brand; Scandal and pressure on its banks have rocked a reputation for stability but many are bullish
Ralph Atkins in Zürich – FT
To foreigners, Switzerland often means Alpine mountains, cows, chocolates — and tax evasion.
goo.gl/voRSFD

Bank of America bans staff from saying ‘Brexit’
Arash Massoudi and Patrick Jenkins in London – FT
Bank of America is warning senior staff not to use the word “Brexit” when talking to clients as it tries to steer clear of the raging debate over the UK’s membership in the European Union.
goo.gl/2mAlfH

IEX’s ambitions to test SEC’s rules
Nicole Bullock – FT
Caught between a desire to promote competition and apply their own rules, the main regulator of the US equity market could well end up exacerbating the complexity of buying and selling shares for investors.
goo.gl/KroxcK

LSE chief Xavier Rolet warns rivals must adapt as markets reshape
Philip Stafford – FT
The London Stock Exchange Group says its rivals have to adapt to rapidly changing global financial markets or face losing customers, and the shifting sands have driven its proposed $20bn all-share combination with Deutsche Börse.
goo.gl/5yLcMx

Kyle Bass: The Man Who Shorted The World; Before founding his hedge fund, Kyle Bass worked for Bear Stearns in Dallas
By JOHN CARNEY – WSJ
Who is Kyle Bass? Kyle Bass and Bear Stearns go way back.
goo.gl/tW4KkF

Prosecutor in Bear Stearns Case to Leave U.S. Attorney’s Office
By BEN PROTESS – NY Times
James G. McGovern and Celia Cohen of the United States attorney’s office in Brooklyn in 2013. Credit Michael Appleton for The New York Times
A senior federal prosecutor who led one of the few criminal cases against Wall Street executives in the aftermath of the financial crisis announced on Tuesday that he was stepping down from his role in the government.
goo.gl/VI6TXp

Bloomberg agrees to pay $3M in overtime settlement
By Kevin Dugan – NY Post
Bloomberg Markets will cease to exist as a monthly magazine
Bloomberg, the financial media giant that sells $24,000-a-year data terminals, agreed to a $3.2 million settlement on Tuesday after customer service employees claimed in a federal class-action lawsuit that the company didn’t pay them overtime wages.
goo.gl/SXUnHi

Regulatory

Special Address of CFTC Commissioner J. Christopher Giancarlo Before the Depository Trust & Clearing Corporation 2016 Blockchain Symposium
CFTC
Two decades ago, as the Internet was entering a phase of rapid growth and expansion, a Republican Congress and the Clinton administration established a set of foundational principles: the Internet was to progress through human social interaction, voluntary contractual relations and free markets. Governments and regulators were not to harm the Internet’s continuing evolution. Because of this “do no harm” approach, the Internet created millions of jobs, transformed our economy forever and improved standards of living across the globe.
Today, as you know, a new technology is at hand that may offer a similarly profound tool to share networks of information. Yet, its development is at risk of being stymied by disparate and uncertain regulation.
It is time again to remind regulators to “do no harm.” That is what I want to speak to you about this afternoon.
1.usa.gov/1okkmnz

Lew says announcement on woman on US currency coming soon
Martin Crutsinger, – Quartz
Treasury Secretary Jacob Lew says he is getting closer to announcing a decision on who will be the first woman on U.S. paper currency in more than a century. He says even though the woman selected will go on the $10 bill, Alexander Hamilton will still be honored.
goo.gl/xDjsR5

SIFMA Asset Management Group Recommends Improvements to the SEC Proposed Rule Regulating Fund Use of Derivatives
SIFMA
SIFMA’s Asset Management Group (SIFMA AMG) today announced it has submitted a comment letter to the Securities and Exchange Commission (SEC) regarding the SEC’s proposed rule governing registered funds’ use of derivatives. SIFMA AMG’s letter supports the SEC’s regulatory goals, while expressing opposition to the proposed portfolio limits and recommending important changes to certain aspects of the proposed rule, including changes to the proposed portfolio limits and asset segregation requirements.
goo.gl/3bI3GC

Special Address of CFTC Commissioner J. Christopher Giancarlo Before the Depository Trust & Clearing Corporation 2016 Blockchain Symposium; Regulators and the Blockchain: First, Do No Harm
CFTC
Good afternoon, ladies and gentlemen. Thank you for your warm welcome. It is a pleasure to be here with you today.
goo.gl/tm6OnZ

Exchanges & Trading Facilities

Bats expands ETF services as business booms; Bats has acquired ETF.com as it adds to ever-growing ETF business.
By Hayley McDowell – The Trade New
Bats Global Markets is set to acquire ETF.com, an ETF market news and analysis provider, as it expands its offering to investors.
goo.gl/W08Gqt

Treasurer Scott Morrison opens door to ASX competitor, offshore buyers
Sydney Morning Herald
The government will end the ASX’s monopoly over clearing share trades in mid 2017, but the change could be irrelevant if the exchange opts to use blockchain technology, which does away with the need for this step. The ASX may also become the target of overseas suitors after Treasurer Scott Morrison announced on Wednesday that the government would relax ownership restrictions on the ASX, making it much easier to merge with other exchanges or access extra capital.
goo.gl/5eZDdA

Annual Meeting Of NZX Shareholders
Mondovisione
NZX is today giving notice that the 13th Annual Meeting of shareholders of NZX Limited will be held in the Pakuranga Hunt Room at the Ellerslie Event Centre, Ellerslie Racecourse, Level 2, 80 Ascot Avenue, Auckland, on Friday 20 May 2016, commencing at 9.30am.
goo.gl/uj65KK

Face to face with Christian Dimanski
Eurex
Mr. Dimanski, how long have you been with Eurex Exchange and what did you do before you joined our company?
goo.gl/UCIxlE

Politics

 

Hedge Funds & Managed Futures

Hedge Fund Guru Jacob Wohl, 18, Switches Strategy To Managed Futures
By Mark Melin – Value Walk
Self-promoted world beater Jacob Wohl, the teenage “hedge fund trader” dubbed “The Wohl of Wall Street” and profiled by many outlets – has transitioned from his previous value, stock picking approach to formally offer a managed futures strategy. This is a significant strategy drift for the fund manager who previously professed his idolatry for Warren Buffet, perhaps the antithesis of managed futures.
goo.gl/QBZ4R5

Smart Beta vs. the Monkeys
Chief Investment Officer
A blindfolded monkey throwing darts at a newspaper’s financial pages could select a portfolio that would do just as well as one carefully selected by experts,” wrote economics professor Burton Malkiel in his 1973 book A Random Walk Down Wall Street. In the flurry of research papers and blog posts that have accompanied the rise of smart beta, some have leveled the same accusation at the investment world’s new kid on the block. Specifically, that any portfolio selected by Malkiel’s monkey would have the same value and small-cap biases that are found in factor-based strategies.
goo.gl/cfo97Q

The rise and rise of robo-advisers
By Rachael Revesz – Financial News
From large, established financial services providers like JP Morgan, Vanguard and Charles Schwab to Silicon Valley startups like financial planning firm LearnVest and online brokerage firm Motif, the direct-to-consumer robo-adviser market in the US is quickly becoming a fixture in the asset management landscape.
goo.gl/IQ68bS

Investors mine Big Data for cutting-edge strategies
Robin Wigglesworth – FT
When Wayfair, a $4bn online retailer, released its quarterly results last year they proved unexpectedly buoyant, delighting investors who sent its shares up more than 20 per cent.
goo.gl/msM708

Traders Prepare for Death of a Junk Rally
By Lisa Abramowicz – Bloomberg Gadfly
Many investors have been eagerly awaiting a credit reversal. Now they may be working with a sharpened tool to take advantage of it.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
goo.gl/wsxRyA

John Hancock Fills Out Smart-Beta Sector ETF Suite
ETF Trends
Along with its six other smart-beta ETFs, John Hancock’s funds track indices developed by Dimensional Fund Advisors. The smart-beta ETFs’ underlying indices select components based on company size where a premium is given on smaller companies over larger companies, relative price where value stocks are selected over growth and profitability where more profitable companies are overweight.
/goo.gl/08ES27

Banks & Brokers

The Rise and Fall of Tim Leissner, Goldman’s Big Man in Malaysia
Max Abelson, Elffie Chew – Bloomberg
The bank’s $6.5 billion deals with 1MDB made money and trouble; The prime minister of Malaysia had a message for the crowd at the Grand Hyatt San Francisco in September 2013. “We cannot have an egalitarian society — it’s impossible to have an egalitarian society,” Najib Razak said. “But certainly we can achieve a more equitable society.”
goo.gl/7XNXjL

JP Morgan poaches clearing operations head from Goldman Sachs; JP Morgan is bolstering its European team as it prepares for the onset of mandatory clearing for OTC derivatives.
By Joe Parsons – The Trade New
JP Morgan has hired Goldman Sachs’ head of clearing operations as part of a wider move to boost its European clearing division.
goo.gl/ajgGK7

Auerbach Grayson Launches U.S. Equities Trading Business
By John D’Antona – Markets Media
As the buy side scours the equity markets for alpha, New York-based broker Auerbach Grayson is pointing institutional investors back to human traders who can tap their liquidity books and provide custom service that an algorithm can’t.
goo.gl/iZ8J17

Clearing & Settlement

Eurex pilots direct clearing for the buy side; CCP predicts 80% reduction in capital charges for banks acting as clearing agents
Frederico Mollet – Eurex
Eurex has become the first central counterparty (CCP) to pilot a service in which buy-siders become direct members – a change it hopes will help reverse the flow of banks exiting the clearing business. Sources close to the project – known as ISA Direct – estimate an 80% cut in the capital currently consumed by clearing banks, which traditionally sit between their clients and a CCP, executing back-to-back trades with each. In the ISA Direct model, clients have a contractual relationship…
goo.gl/fu7t1Q

Euronext’s Interbolsa Fosters Pan-European Settlement With T2S Migration
Finance Magnates
Euronext’s Interbolsa is responsible for central securities depository and settlement systems management in Portugal. The project was initially launched by the European Central Bank – Eurosystem, constituting one of the largest infrastructural initiatives to date. Its goal is to provide a single pan-European platform for securities settlement in central bank money, which up until now had largely proceeded on a fragmented basis on the continent.
goo.gl/G1urHt

Derivatives clearing: issues for pension schemes
International Law Office
Almost four years since the EU Over-the-Counter (OTC) Derivatives, Central Counterparties and Trade Repositories Regulation (648/2012) (EMIR) came into force, one of its main requirements – to clear certain OTC derivative trades through a central counterparty – is now coming into effect. EMIR is Europe’s response to the G20’s commitment to implement measures to increase transparency and reduce counterparty credit risk and operational risk in the derivatives market. The clearing obligation will affect many derivatives users, including EU and non-EU funds, asset managers, pension schemes and insurers.
goo.gl/rBmC1Q

Indexes & Products

FTSE Russell launches China A and H share index
Fund Strategy
The new index has been licensed by Deutsche Bank for ETFs listed on London Stock Exchange and Deutsche Börse. The FTSE China A-H 50 index will track the largest 50 China A share companies by market capitalisation but will invest in the lowest-priced share class between the A and H share classes.
/goo.gl/AeZCpr

ABR Dynamic Funds Introduces “Smart Volatility” Mutual Fund
Yahoo Finance
ABR Dynamic Funds, LLC, a New York-based asset management firm, is introducing its “Smart Volatility” mutual fund, the ABR Dynamic Blend Equity and Volatility Fund (ABRVX). The fund, driven by algorithms designed to anticipate and dynamically rebalance during market volatility, is a welcome source of diversification intended to improve portfolio performance in turbulent markets. Composed of S&P 500 Index (SPX), CBOE Volatility Index and cash exposures, the ABR Dynamic Blend Equity and Volatility Fund rebalances daily based on current and anticipated volatility.
yhoo.it/22Y05Us

Post-Libor squeeze could stifle benchmarks, industry warns; Obligations set to mushroom for administrators and contributors
Catherine Contiguglia – Risk.nt
European regulators are trying to clean up the business of benchmarking. Participants fear they will choke it instead. Tough new responsibilities for contributors – including ensuring the robustness of input data and its storage – may further shrink the pool of willing participants, critics warn. Administrators also face obligations that could make the business unattractive for smaller players, including overseas firms that will be caught in the dragnet if their benchmarks are used by European…
goo.gl/MwBCN1

EBS BrokerTec And ICAP Information Services Launch Sterling Repo Index Rate
Mondovisione
EBS BrokerTec, ICAP’s market-leading electronic foreign exchange (FX) and fixed income business and ICAP Information Services (IIS), the information division of ICAP, announce today that they have launched the Sterling Repo Index Rate (£RIR). The daily index measures the effective cost of funding for Sterling Government bonds.
goo.gl/L5xnEX

Indexing the Brexit
Kevin Horan, S&P Dow Jones Indices
The central bank of England has said that the European Union referendum in June 2016 is the most significant near-term domestic risk to the country’s financial stability. Because of its separate currency, Britain is one of the countries that could disassociate itself most easily from the EU. It is a long time until June, and the question lingers: is this another Scotland situation with a heavy amount of press, but in which case, like Scotland, the U.K. will stay just where it is?
goo.gl/ZlNkXz

Technology

Duco Recognised as One of Europe’s Top Fintech Firms
du.co
Duco, a global provider of award-winning data control services, has been named in the European FinTech Top 100, a list of the most promising and innovative fintech companies across the continent.
bit.ly/2316yxO

London’s Carrhae Capital Selects Eze Software For Portfolio Accounting
EZE Software Group
Eze Software Group, a premier provider of global investment technology, today announced that Carrhae Capital, a London-based long/short asset manager, has expanded its use of EzeSoft Investment Suite with portfolio accounting capabilities. Already a long-time user of Eze Software’s OMS, the hedge fund manager now uses Eze Portfolio Accounting (formerly Tradar) to manage its portfolio accounting needs, including valuation and reporting. Carrhae Capital has approximately $1 billion in assets under management and focuses on emerging markets.
/goo.gl/PMwJA2

Hackers Breach Law Firms, Including Cravath Swaine and Weil Gotshal; Investigators explore whether cybercriminals wanted information for insider trading
By NICOLE HONG and ROBIN SIDEL – WSJ
Hackers broke into the computer networks at some of the country’s most prestigious law firms, and federal investigators are exploring whether they stole confidential information for the purpose of insider trading, according to people familiar with the matter.
goo.gl/08j6wO

Blockchain tipped as fix for margin segregation; ISAs could move to distributed ledgers within 18 months, Barclays technologist claims
Steve Marlin – Risk.net
Blockchain technology could ease the operational complexities associated with individually segregated accounts (ISAs) for clearing and boost their popularity, a technologist at Barclays has claimed. “We need to come up with an automated solution to help individual segregation, where you have a plethora of subaccounts, and potentially a shared ledger solution could help,” said Lee Braine, a member of Barclays’ chief technology office. “Currently, across the industry, there are a number of solutions,…
goo.gl/n3ijgD

ICAP’s Jenny Knott explains practical post-trade blockchain approach
International business Times
Recently ICAP, the world’s largest interdealer broker, released details of a proof of technology using blockchain. The announcement also heralded a partnership between ICAP and newly-launched enterprise blockchain provider Axoni.
goo.gl/Gt9M0M

Open Source Blockchain Effort For The Enterprise Elects Leadership Positions And Gains New Investments – Hyperledger Project Board Of Directors And Technical Steering Committee Chair Elected; New Member Investments Underscore Demand For Open Source Blockchain Platform Development
Mondovisione
The Linux Foundation, the nonprofit organization enabling mass innovation through open source, today is announcing the Hyperledger Project has filled key leadership positions and is welcoming new members. The Hyperledger Project is a collaborative effort to establish, build and sustain an open, distributed ledger platform that will satisfy a variety of use cases across multiple industries.
goo.gl/m2QnyP

Enforcement

Former TV Commentator Settles Penny Stock Fraud Charges
SEC.gov
The SEC alleges that Tobin Smith and NBT Group Inc. were paid to prepare and disseminate e-mails, online blogs, articles, and other communications touting the stock of IceWEB Inc., a data storage company. Smith and NBT did not fully disclose their compensation to investors, who did not have the benefit of knowing that part of their pay was tied to a sustained increase in IceWEB’s share price. The promotional material also contained false and misleading statements intended to artificially increase the trading volume and share price of IceWEB’s stock.
1.usa.gov/21RPkRe

***DA: Not to be confused with WebICE, ICE’s e-trading platform.

SEC: Biotech Company Misled Investors About New Drug’s Status With FDA
SEC.gov
The SEC alleges that AVEO Pharmaceuticals Inc. concealed the FDA’s level of concern about Tivozanib in public statements to investors by omitting the critical fact that FDA staff had recommended a second clinical trial to address their concerns about patient death rates during the first clinical trial. When the FDA made public months later that it had recommended an additional clinical trial, the company’s stock price declined 31 percent. AVEO never conducted an additional trial, and the FDA later refused to approve Tivozanib.
1.usa.gov/21RNNKS

ASIC’s latest enforcement report outlines key outcomes and areas of focus for the future
ASIC
ASIC has today released its enforcement report for the period 1 July 2015 to 31 December 2015.
goo.gl/yrFCAk

ASIC accepts enforceable undertaking from SMSF advice provider CMH Financial Group
ASIC
ASIC has accepted an enforceable undertaking (EU) from Sydney-based CMH Financial Group Pty Ltd (CMH) and the sole director, Daniel White, after an ASIC surveillance found CMH had failed to provide advice about self-managed superannuation funds (SMSF) that was appropriate and in the best interests of clients.
goo.gl/33U55A

Sebi bars 246 entities from market for fraudulent trades in Kailash Auto
Sebi
Sebi noticed sudden and unusual price movement and volumes between 7 November 2014 and 31 December 2015 in the shares of Kailash Auto
goo.gl/4vM3Ip

Environmental & Energy

Banks press palm oil growers over environmental standards
Jeevan Vasagar in Singapore – FT
International banks are pressing producers of palm oil — a key ingredient in dozens of supermarket goods ranging from shampoo and toothpaste to margarine and fish fingers — to maintain stricter standards of environmental protection in exchange for receiving finance.
goo.gl/DxH2rd

Major Snowstorm to Hit U.S. Cattle Herds at Worst Possible Time
Bloomberg
Snow is on the way for Wyoming, and it’s coming at the wrong time of year for ranchers.
goo.gl/Q3mq0I

Exxon Mobil Climate Change Inquiry in New York Gains Allies
By JOHN SCHWARTZ – NY Times
More government officials are asking what Exxon Mobil knew about climate change.
goo.gl/o1tI6K

Asia-Pacific

Chinese shell out for peanuts while US inventories at record high
Emiko Terazono – FT
Stark disparities have appeared in two key peanut markets as the Chinese are shelling out more for the groundnut amid a scramble for supplies, while on the other hand, record US inventories have meant that farmers there may not have enough warehouse space to store the bar snack.
goo.gl/Auvu9r

Hong Kong IPOs: Is the Market Looking Up?
Watch the video – Yahoo Finance UK
Eddie Wong, partner of capital markets services at PWC, discusses the debut of two banks on the Hong Kong Stock Exchange and the outlook for the IPO market. He speaks to Bloomberg’s Rishaad Salamat on “Trending Business.”
yhoo.it/1SwEcqp

Fitch: Hong Kong Banks’ China Exposure Down but Remains Key Risk
Reuters
Hong Kong banks’ exposure to mainland China is declining but remains a significant concentration and key risk for the sector, says Fitch Ratings. The territory’s deep financial and trade linkages with the mainland supported high growth rates over the previous decade, but will translate into continued deceleration in economic growth alongside China’s own deceleration.
reut.rs/1SwEuNW

Frontier Markets

Islamic Finance footprint across Asian Markets offers an opportunity to respond to headwinds CPI Financial News
At the end of 2013, Islamic banking and Islamic bonds or Sukuk in Asia had made up 49 per cent and 45 per cent, respectively, of global Islamic financial assets. Malaysia is one of the leaders with a 10 per cent global share of Islamic banking assets at the end of 2013, with established markets in Bangladesh, Brunei Darussalam, Indonesia and Pakistan and growing interest from non-Muslim economies such as Singapore, Japan, Republic of Korea and Hong Kong, China. The benefits have been significant. Islamic finance has been an important alternative source of funding for infrastructure in the region, it has provided an attractive source of investment finance for both governments and businesses, and it promotes financial stability because it is based on the principles of risk sharing. Of even greater benefit is its potential for delivering much-needed financial services to Muslims
goo.gl/TZZVtN

World’s best economy betraying investors as India earnings decay; Profit estimates for Sensex companies cut by most since 2009; Sensex set for best month in four years as foreigners return
Bloomberg via Business Standard
Talk to a skeptic about this month’s global stock rebound and the first thing he mentions is likely to be earnings, or the lack thereof. Why should the nation with the brightest economic outlook be any different?
goo.gl/QZShq4

Dovish Fed Pushes Investors Back Into Emerging Markets
The Street
The dovish comments by Fed Chair Janet Yellen on Tuesday have given wings to the U.S. stock market, as Rev Shark remarked after her speech. But one asset class that has been rallying under the radar since the start of the year will benefit the most. Emerging markets have staged an impressive comeback, after being hammered for a long time. The iShares MSCI Emerging Markets ETF (EEM) is up more than 5% since the beginning of the year, and rose by 1.21% in premarket trading on Wednesday.
goo.gl/YSh4f1

Sebi tightens noose on commodity exchanges; Sebi also advised commodity exchanges to make necessary amendments to the relevant bye-laws for cyber security
Business Standard
Tightening the noose on commodity trade, the Securities and Exchange Board of India (Sebi) has directed commodity exchanges to comply with the provisions of client code modifications in equity markets within one month.
goo.gl/xiKiHP

Miscellaneous

Nearly 80 Years After the Hindenburg Disaster, Airships Are Poised for a Comeback; Companies see hybrid blimps as possible mode for transporting cargo, as well as tourism opportunities
By ROBERT WALL – WSJ
The age of the airship is preparing for a new dawn.] More than a century after the first Zeppelins took to the sky, airship makers including Lockheed Martin Corp. say fresh commercial interest is reviving the fortunes of the giant flying machines.
goo.gl/KquuSj

Cargill’s head of cotton exits amid commodities gloom
Reuters
The head of cotton at Cargill Inc has left the firm in the latest of a series of changes at one of the world’s largest privately held corporations amid a commodities rout.
goo.gl/vrZTDO

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