First Read

Gary DeWaal

Business Remodeling: Satyam Kancharla of Numerix Says Firms Must Rethink Risk and Collateral Management
There has been an avalanche of regulation over the past several years. While firms are digging out from under it in an effort to comply, others are looking for new opportunities this environment presents. Satyam Kancharla, chief strategy officer of Numerix, told John Lothian News’ Jim Kharouf that firms must find ways to create more efficiencies in terms of collateral management and looking at their operations in a more holistic way. The combining of OTC and futures into cleared structured environments are forcing firms to break down those trading desk silos that have been part of firms over the years.

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The Spaces in Between: A Case for a Shorter Trading Day
Paul Daley – TabbFORUM
Here are 5 reasons why the U.S. should consider shortening the trading day, either by closing earlier or instituting a lunch break.

***JM: It’s an interesting argument. I suspect that when considering the issue, one will find a hefty component of fear that if we close, even for a minute, customers will use another store besides ours. Personally, I’d rather break for lunch.


Volcker doing job despite Kafkaesque turns
John Authers –
The best rules are succinct. The Ten Commandments, for example, are punchy, and leave little ambiguity. The Volcker rule, when first proposed, seemed simple.

***JM: It’s true that concern over unintended consequences shouldn’t shut down rulemaking, because it really is inevitable. Even so, there’s a lesson waiting to be learned about the wisdom of taking smaller bites and swallowing more frequently.


CME Group Announces Solution to Delivery Gap in US Treasury Bond Futures
CME Group, the world’s leading and most diverse derivatives marketplace, today announced a solution to address a gap in the delivery basket of the U.S. Treasury Bond futures. The gap results from the U.S. Treasury’s suspension of 30-year Treasury bond issuance between early 2001 and early 2006. CME Group will exclude the 5-3/8% February 2031 U.S. Treasury bond (cusip 912810FP8) from contract grade eligibility for the June 2015, September 2015, and December 2015 delivery months only.

***JM: Ha ha, I remember when they shut down 30-year bonds back in 2001. That was what I traded, then. Funny, funny days, those were.


Irish stock market proves the detractors wrong
Irish Examiner
So there is life in the old dog yet. After a long and extended period, during which the end of the Irish Stock Exchange (ISE) was being heralded by some, a fresh wave of companies and equity issuance suggests something different is afoot.

***JM: Predictors of disaster seem to be right about as often as predictors of days of miracles and wonder, so to speak.


‘Chocfinger’ sells trading arm for price of a Mars bar
Emiko Terazono in London –
Anthony Ward, the cocoa trader known as “Chocfinger” for a string of audacious deals in commodities markets, has been forced to sell his London-based cocoa, coffee and sugar trading business for just $1 – about the price of a Mars Bar.

**JK: You woulda thought he could have sweetened the deal. (I’ll be here all week folks.)


Cyber criminals steal via wealth managers
Steve Johnson –
Cyber criminals are increasingly hacking into the systems of wealth managers in order to steal money from better-protected clearing banks, according to Kroll, the investigations agency.

***JM: Good template sentence, there: “Cyber criminals are increasingly hacking into the systems of _____ in order to steal.”


Bitcoins Fail Currency Test in Scandinavia’s Richest Nation
Saleha Mohsin – Bloomberg
Bitcoins were dealt a blow in Norway as the government of Scandinavia’s richest nation said the virtual currency doesn’t qualify as real money.

***JM: Assets fit better into Norway’s tax system, which is really only half a system: whatever you make, you can keep half, unless they take the other half later.


You Can Get Some Big Things Done When It’s Not All About You
Justin Fox – Harvard Business Review
There was a lunch held last week in New York to celebrate one of the most important American business leaders of the past half-century. It started off conventionally enough: the host and four prominent speakers recounted the deeds and impact of the honoree, at some length. When they had finished, the great man himself, who had been sitting at a table in the audience eating a peanut butter and jelly sandwich, walked to the front of the room.


Gary DeWaal’s Bridging the Week: December 9 to 13 and 16, 2013 (Volcker, Market Structure, Personal Accountability)
Gary DeWaal and Associates LLC
One dominant story involving the Volcker Rule and many other stories fill out international developments involving financial market industry participants last week.



MarketsWiki Page of the Day
Tim McDermott

MarketsWiki Recent Updates


Franck Borgel; Francois Combes; Ginger Szala; Satyam Kancharla; Tim McDermott; Kenneth E. Bentsen, Jr.

Companies, Organizations and Groups

Newedge; North American Derivatives Exchange (Nadex); IG Group Holdings


45,909,232 pages viewed, 7,720 articles, 169,526 edits
MarketsWiki Statistics

Lead Stories

Exchanges Near Infrastructure-Upgrade Deal
Bradley Hope –
U.S. exchanges are near an agreement to upgrade a central piece of the country’s trading infrastructure that critics say has been neglected and caused a serious market outage in August, according to people with knowledge of the discussions.

CME unveils new oil futures contract to tackle Canadian discount woes
CME Group Inc will launch its first light sweet oil futures contract for Canada on Monday in the latest attempt to help producers limit the price misery caused by overcrowded pipelines.

Big-name dealers back LSE and BlackRock ETF push
Tim Cave – Financial News
The London Stock Exchange Group has secured the backing of a raft of influential dealers and market-makers for a new type of exchange-traded fund, as efforts to improve liquidity in Europe’s fragmented ETF market gather pace.

The year dark trading surged (and regulators hit back)
Tim Cave – Financial News
It was the year that dark trading became the victim of its own success. While activity in off-exchange venues reached record levels in both the US and Europe, regulators across the globe have rounded on the phenomenon. American and EU regulators are working on tighter rules, while their counterparts in Canada and Australia have already clamped down.

Ten things that didn’t happen in 2013
Ben Wright – Financial News
A great many things didn’t happen this year. On one level, that’s true every year: an infinite number of things don’t happen every day. But, as in a Samuel Beckett play, 2013 found meaning in the silences, in the negative space between events and in the waiting for things which never came to pass.

What are regulators getting right and wrong? And what advice would you give them?
Financial News
Don’t look for scapegoats, let the market do its work, don’t over-regulate and keep an eye on anyone generating giant profits… senior executives polled by Financial News offer advice to regulators.

What is the biggest mistake made by the industry since the crisis and what do you fear is next?
Financial News
Slow cultural change, complacency, greed in ascendancy over fear… senior executives offer frank answers to the question posed by Financial News.


SEC to Hold Compliance Outreach Program for Investment Companies and Investment Advisers
The Securities and Exchange Commission today announced the opening of registration for its compliance outreach program’s national seminar for investment companies and investment advisers. The event is intended to help these firms’ Chief Compliance Officers (CCOs) and other senior personnel to enhance their compliance programs for the protection of investors.

U.S. Supreme Court agrees to weigh bank fraud case
The U.S. Supreme Court on Friday agreed to decide what federal prosecutors need to prove in order for someone to be convicted of bank fraud under federal law.

ESMA Hearing On Future Market Abuse Measures
The European Securities and Markets Authority (ESMA) will be holding an open hearing on its discussion paper on possible implementing measures on the Market Abuse Regulation (MAR).

ESMA Seeks Data Expert Advisors
Giulia Lasagni – WatersTechnology
European regulator the European Securities and Markets Authority (ESMA) is recruiting market data reporting experts to advise on potential complications stemming from the overlap of recent EU financial regulation.

Scila and FIMAS to co-host trade compliance event in Frankfurt
Scila AB and FIMAS GmbH, its implementation partner for the German market, will host a round table on trade compliance in Frankfurt.

Notice to Members I-13-40: Ballot Enclosed for Voting in NFA’s Annual Election in the CPO/CTA Category

National Futures Association: Allocation of Bunched Orders – Proposed Amendments to NFA’s Interpretive Notice Entitled NFA Compliance Rule 2-10: The Allocation of Bunched Orders for Multiple Accounts and NFA’s Interpretive Notice Entitled NFA Compliance Rule 2-10: The Allocation of Bunched Retail Forex Orders for Multiple Accounts

[Canada] AMF adjusts its annual and other fees

Exchanges & Trading Facilities

TOM Insight November 2013

TOM MTF Statistics Week 50

Reminder: Changes at NASDAQ OMX Riga with changeover to the euro
Latvia is going to join the euro area as of January 1, 2014.

Hedge Funds & Managed Futures

It was a big year for: the asset managers
Mike Foster, Sarah Krouse, Harriet Agnew, Mark Cobley – Financial News
At the beginning of the year, FN identified four fund management execs with a challenge ahead. Here’s how they fared.

Asset management boutiques see surge in new funds
Mike Foster – Financial News
Fund sales by European asset management boutiques have hit record levels.

Marketing levy threat for fund managers
Ayesha Javed and Becky Pritchard – Financial News
Some national regulators are planning to levy fees on alternative investment fund managers who market funds in their countries in a move that has triggered angry protests from trade bodies.

Hedge Fund Lions’ Den: Emerging managers learn their fate
Margie Lindsay –
The lions compare notes and exchange opinions on the three emerging managers who then face the lions to hear how much – if any – allocation Andrew McCaffery, Luke Ellis and Stanley Fink will make

Human? Then You Might Have These Issues With Trading
Harriet Agnew – MoneyBeat – WSJ
When asked at a dinner party what accounted for his success, renowned investor Charlie Munger – Warren Buffett’s business partner – replied that he was rational. To classical economists, that market participants were rational was taken for granted. But the notion has been criticized in the field of behavioral finance, which studies the effects of social, cognitive and emotional factors on economic decisions.

Man takes advantage of GLG funds to create in-house FoHF
Emma Cusworth –
‘Transparency’ is one of the most oft-cited words in today’s hedge fund environment, second only, perhaps, to ‘alpha’. Although the industry is much less opaque today, in a world increasingly measured by the alpha added by managers, transparency can in itself become a key performance driver. How better to access information than by allocating to in-house funds with the underlying managers sitting metres away?

Lyxor expects demand for alternatives to increase
Margie Lindsay –
Close relationships with hedge funds and Lyxor staff are at the heart of its reputation for independent research, asset management, its managed account platform and its other activities globally

Interactive Data Adds GFI, Icap, Commodities to FutureSource
Faye Kilburn – WatersTechnology
Interactive Data is adding new commodities datasets from interdealer brokers GFI and Icap, UK-based agricultural specialist Informa Agra and pricing and news provider OPIS (Oil Price Information Service) to its FutureSource market data and analytics workstation to broaden its coverage of off-exchange energy and commodities markets.

CFTC Commitments Of Traders Reports Update

Banks & Brokers

Several Swiss cantonal banks to join U.S. tax deal
Several Swiss regional banks said on Monday they would cooperate with U.S. officials to avoid prosecution in a crackdown on Swiss lenders suspected of helping wealthy Americans evade taxes through offshore accounts.

Barking Up Goldman’s Tree
David Reilly – MoneyBeat – WSJ
Many things have changed on Wall Street the past few years. But at least the old Goldman Sachs-Morgan Stanley rivalry still exists to some degree.

City of London Talks of ‘Less Draconian’ Bonus Cap Rules
Matt Turner – MoneyBeat – WSJ
The final rules on the European Union-wide bonus cap for bankers are out. And lawyers in the City of London, where the impact is likely to be felt hardest, are beginning to talk of a partial victory.

Regulator Leaves Loophole for Some Bankers to Avoid E.U. Bonus Caps
Some European bankers making more than E500,000 a year may be able to avoid caps on their bonus compensation if their jobs do not cause potential financial risk to the bank, according to new draft rules introduced on Friday by a European regulator.

Financial Advisers Are Lured to Stay With Perks That Pay Off Later
Financial advisers have traditionally had commitment problems when it comes to their firms. Now, some big banks want to persuade them to stick around longer with the lure of extra pay. Morgan Stanley and Bank of America Corp. are among the companies that have introduced new types of incentive bonus programs for the tens of thousands of advisers in their retail brokerages.

Financial Advisers Are Lured to Stay With Perks That Pay Off Later
Financial advisers have traditionally had commitment problems when it comes to their firms. Now, some big banks want to persuade them to stick around longer with the lure of extra pay. Morgan Stanley and Bank of America Corp. are among the companies that have introduced new types of incentive bonus programs for the tens of thousands of advisers in their retail brokerages.

Clearing & Settlement

SIX Securities Services win mandate from Hungarian CSD Keler
In a landmark agreement, Switzerland’s post-trade services provider SIX Securities Services has signed a partnership with Keler Ltd., Hungary’s post-trade infrastructure, to provide international settlement and custody services.

CFTC correct in row over US Treasury liquidity – poll
Lukas Becker –
The Commodity Futures Trading Commission (CFTC) is right to require central counterparties (CCPs) to have a committed funding backstop in place for US Treasury bonds and other government debt, according to a new poll.

LCH.Clearnet’s CDSClear Now Handling Single-Name CDS
James Rundle – WatersTechnology
LCH.Clearnet has announced that its credit-default swap (CDS) clearing service, CDSClear, will now offer single-name CDS clearing.

The Central Counterparty Of Moscow Exchange To Fulfill Obligations Of Three Banks Shut Down By The Bank Of Russia

Indexes & Products

ETF innovator to launch CoCo financials fund
Joe McGrath – Financial News
Hans Günther Bonk – the co-founder of IndexChange, the legacy ETF business that later became the foundation of iShares’ German operation – is launching a fund investing in the subordinated debt and contingent convertibles of banks and insurers.

Russell Revamps, Unbundles Index Pricing
Faye Kilburn – WatersTechnology
Russell Indexes, the index provider subsidiary of asset manager Russell Investments, is introducing a new pricing model for its RussellTick real-time feed of US and global consolidated index data, reflecting enhancements made to the product as part of an index data distribution partnership with NYSE Technologies, the data and technology arm of NYSE Euronext.

Oslo Børs Nibor U-Turn Irks End-Users
Faye Kilburn – WatersTechnology
Norwegian exchange group Oslo Børs last week began calculating the Norwegian Interbank Offered Rate (Nibor) benchmark rate, after being appointed the calculation agent by Norwegian financial industry association Finance Norway. However, end-users are unhappy with the distribution terms after learning that Oslo Børs will bundle the Nibor information into its existing market data feeds, instead of making it available as a separate dataset, as the exchange had previously informed users.

BATS Exchange Welcomes New iShares ETF

Deutsche Börse: Component Change Made To DAX Ex Financials 30 Index


IEX Group Deploys Redline Trading Solutions to Support Price Protection and Enhance Execution Quality
Redline Trading Solutions today announced that IEX, the first alternative trading system owned by buy-side investors, is using Redline’s ultra-low latency InRush 3 Accelerated Ticker Plant on its new trading venue for reliable, timely and accurate market data.


Government Rests Case Against Former SAC Trader
After three weeks and 13 witnesses, the government on Friday rested its insider trading case against Michael S. Steinberg, a former fund manager at SAC Capital Advisors.

RPT-Swiss banker in eye of U.S. tax evasion storm to face court
For years, former top Swiss banker Raoul Weil had U.S. charges for allegedly helping rich Americans avoid tax hanging over him. Now that he is due to appear in a Florida court on Monday, his lawyer says he is looking forward to confronting them.

Environmental & Energy

Guangdong to Freeze Trading Unless Emitters Take Part in Auction
China’s southern province of Guangdong won’t allow companies to trade emission permits they receive free of charge from the government unless they participate in auctions starting next week, an official said.

EU Maritime Carbon Rules Must Avoid Global Row, Governments Say
The European Union’s planned rules to monitor greenhouse gases from ships must be in line with international law to avoid conflicts with other nations, according to member states including Italy and Ireland.

UPDATE 1-EU to probe German renewable energy discounts -draft letter
The European Commission is opening an investigation into the discounts German industries get on renewable energy surcharges, according to a draft letter sent to Berlin, which could lead to higher costs for thousands of firms in Europe’s biggest economy.


KRX joins hands with Eurex in developing derivatives
South Korea’s bourse operator said Friday it has agreed with its German counterpart to exchange financial know-hows and forge deeper ties to develop new derivative instruments.

Small-firm exchange fully opened by govt
Li Qiaoyi –
The State Council, China’s cabinet, announced over the weekend that the national over-the-counter (OTC) market has opened up full access to qualified companies, offering a fresh incentive to the country’s small businesses which are in need of funding.

Tiger economies bounce back
Denise Law –
Thailand is in the grip of another bout of civil unrest. The Philippines is still recovering from a devastating typhoon. Southeast Asia does not look the most obvious place for an investor to put his or her money now, but the region has also been home to some of the best-performing stock markets in the world over the past five years.

Southeast Asia faces a perfect storm
Josh Noble in Hong Kong –
Rising interest rates, slowing economic growth, political uncertainty and a stronger US dollar – any one of these factors could spell trouble for the small, volatile markets of southeast Asia. But in 2014, the region looks set for the perfect storm of all four.

China to crack down on price fixing of agricultural products
China’s pricing regulator said it will crack down on price manipulation in agricultural products to help protect low-income citizens, widening its probe on antitrust violations that has targeted some well-known global firms.

China Everbright, in Hong Kong IPO Prospectus, Admits to Interbank Loan Default
Dinny McMahon – MoneyBeat – WSJ
Default is the hardest word. When China’s banks stopped lending to one another in June, prompting a cash crunch that sent interbank lending rates soaring, rumor had it that at least one bank had defaulted on a loan it was due to repay to another bank. At the time no bank fessed up.

Why Regulators Don’t Scare SoftBank’s Masayoshi Son
Mayumi Negishi – MoneyBeat – WSJ
Masayoshi Son, the fiery head of SoftBank Corp., has never been one to shy away from regulatory battles.

HKEx: In relation to the matter of Tungda Innovative Lighting Holdings Limited: Cancellation of listing

Thai Bourse Announces SET Indices Semi-Annual Review Results

Shanghai Stock Exchange Holds Training On Internet Merger, Acquisition In Beijing

Frontier Markets

Bob Diamond to try his fire and passion on Africa
Patrick Jenkins, Banking Editor –
At Barclays he often went by the nickname Red. Appropriately enough, perhaps. To many who worked with him, former chief executive Bob Diamond – full name Robert Edward Diamond – embodied the colour associations of his nom de guerre.

Middle East Billionaire Wealth Keeps Growing
Nicolas Parasie – MoneyBeat – WSJ
The combined wealth held by Middle Eastern billionaires this year grew by 12.4%, one of the fastest growth rates in the world and comparable to Asia and Africa, as regional equity markets have rallied and commodity prices remain high, according to the Wealth-X and UBSUBSN.VX +0.43% Billionaire Census 2013 report.

JP Morgan promotes two to senior roles in Saudi Arabia
JP Morgan Chase has promoted two bankers to senior roles in Saudi Arabia, the bank said in a statement on Monday, after its top banker in the kingdom left earlier this year to join the central bank.

Goldman’s Brazilian Unit Prepares for Market Swings
Luciana Magalhaes – MoneyBeat – WSJ
Expecting market swings in 2014, Wall Street bank Goldman SachsGS +0.04% has increased the capital of its Brazilian unit to around $500 million to ensure it can finance its customers, according to a bank´s top executive.

Dr. Wageh Mostafa Appointed As Vice-Chairman Of The Egyptian Exchange

Dubai Financial Market Announces The Results Of Its Board Of Directors Meeting

DIFC Commissioner Of Data Protection And UK Information Commissioner Sign Landmark Agreement

DIFC Authority Announces Enactment Of DIFC Laws Amendment Law 2013

Update Of TASE Equity Indices As Of December 22th, 2013 Due To Perrigo Merger

ADX Partakes In 8th Annual Abu Dhabi Conference

The Amman Stock Exchange Will Be closed On Sunday 15th December 2013

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