First Read

Reaching Out: Middle East Exchanges (Almost) Ready and Waiting
By Jim Kharouf, JLN

The World Federation of Exchanges Qatar 2015 Annual Meeting kicked off on Tuesday in Doha. It’s an interesting place as the Qataris attempt to win the award for city with the most construction. If China still holds the lead in terms of construction cranes, Qatar cannot be far behind, as it continues to prepare for the World Cup Soccer event now just seven short years away. But it’s more than Doha’s 24/7 construction zones. This is a country that is striving to compete as a state-of-the-art commerce center, which includes the Qatar Stock Exchange.

Doha is a place with jaw-dropping growth, now boasting a population of 2 million people. Interestingly enough, it’s not so easy to find native Qataris, as just about everyone you meet is from somewhere else – cab drivers from Sudan, Pakistan and Bangladesh, local public relations staff from Egypt and elsewhere. It is a melting pot that creates a rather fun exercise when I ask, “Are you from Qatar?”

But this is what makes the WFE special in many regards. It’s an organization that has more than 60 exchanges in its membership and moves its annual meeting around the globe each year to locales that are worthy of more visibility. The Doha venue, held at the swanky new Kempinski Hotel, attracts some exchange executives one may never meet elsewhere, from the Palestine Exchange (yes, there really is a stock exchange there, since 1995), to the Aman Stock Exchange, Qatar Stock Exchange, multiple Dubai exchanges and Muscat Securities Market.

It’s where exchange execs can sit down and talk about the challenges, opportunities and partnerships ahead. All three appear to be in front of the Middle Eastern exchanges, which recently instituted cross listing rules for the regional exchanges – a step forward – but are also challenged by different regulatory, ownership and structural issues that have prevented the region from partnering much or uniting, a move that collectively would help attract regional and broader international investment.

Doha is far from the political strife that garners headlines from Syria, Israel and Iraq. But these political realities, whether they are close or not, are considered serious deterrents for investors. Whether it’s Dodd-Frank or European regulation, politics always impacts markets. Here the ripple effects of war and politics extend much further and are another element to deal with.

There is much more to say about the region, which will be covered more in depth soon.


ALTSO Rocktoberfest Chicago, Thursday Evening, City Winery
Tickets to ALTSO’s 4th Annual Rocktoberfest-Chicago will be available for $200 (plus – buy 4 and get the 5th free) until noon on Thursday, October 22. Tickets will then be available at the door, beginning at 6pm, for $250. Be sure to check out our amazing lineup of performances and not to worry, we will also be broadcasting the MLB game for all you Cubbies fans.

***DA: Alas, they may need an asterisk by that comment about the Thursday Cubs game. Let us hope there is one.


ALTSO 2015

CME Group v. Cancer
Doug Ashburn – JLN
In yesterday’s newsletter, we spotlighted CME Group’s current campaigns to raise awareness and funding for men’s and women’s health, by donating $50,000 each to Bright Pink and the Movember Foundation, and another $10,000 to Cancer Research UK

What I failed to mention is that, from now until the end of October, the exchange is matching all donations from the trading community, up to $25,000. For the many employers in Chicago that don’t have matching gift programs, CME Group will take those folks under our wing and match any donation made to this page

Click here to watch a short video and learn how to get involved


SEC Green Lights SNAP Auctions; Market Structure Experts Cite Benefits
CHX – Chicago Stock Exchange
The U.S. Securities and Exchange Commission recently granted final regulatory approval to the Chicago Stock Exchange (CHX) for its on-demand auction product, CHX|snap (SNAP Auctions), which CHX plans to introduce in the coming weeks.
John Kerin, CHX President and Chief Executive Officer, said at a meeting of CHX staff, “The Exchange has overcome the most significant regulatory hurdle to introduce SNAP Auctions. With SEC approval of SNAP Auction rules in hand, we now plan to implement SNAP Auctions shortly after Regulation SCI goes into effect next month.

***** CHX is now an exchange to watch. Interesting new approach, good people on the project and a will to innovate.


Scott Gordon, Rosenthal Collins Group – Seven (Slightly Unconventional) Career Tips From a Former Summer Intern

“Trying is the key. I’ve had some successes in my life and I’ve had a bunch of failures — some spectacular failures… But whichever you have, if it’s a success or a failure, they’re momentary. You can take a victory lap if you have a success or you can take a misery lap if you have a failure. But in either case it’s fleeting, it’s gone and you better get on with your life.”

Scott Gordon, CEO of Rosenthal Collins Group, has career advice that applies whether you are shoveling snow or breeding horses: start by taking a holistic look at what is going on in the industry, not just the day-to-day activities that involve you personally. Gordon expands on his career advice in this video, perhaps most importantly reminding audiences not to obfuscate their lexicon.

Watch the video at »

He was for the community
The Garden Island
Bill Porter, the E-Trade founder who funneled generous portions of his fortune into businesses and nonprofits benefiting organic farming, recreation and community building on Kauai’s North Shore, died Wednesday at his home in Princeville, surrounded by family and friends.

***** We missed this from the other day. Condolences to the friends and family of William Porter of E*Trade. He was a former winner of the Joseph W. Sullivan Option Industry Achievement Award


ISE Statement of Condolence on the Passing of William A. Porter
The International Securities Exchange offers its sincere condolences to the family of William A. Porter, one of the exchange’s co-founders, who recently passed away at the age of 86.

***** It has been a tough year for the ISE with loss of Ivers Riley and now William Porter


The Case for Humble Executives; Leaders with humility listen well, admit errors and are willing to share the limelight
Procter & Gamble Co. Chief Executive A.G. Lafley struck a humble tone during last week’s annual shareholders meeting.

****** There is not enough room here for me to admit all my mistakes. I will be stepping out of the limelight though.


2015 Conference on High Frequency and Algorithmic Trading

When: Monday, November 2, 2015, 8 am to 6 pm

Where: Illinois Institute of Technology, Stuart School of Business – Downtown Campus

565 West Adams Street

Chicago, IL 60661

The IIT’s Stuart School of Business is hosting a conference on HFT and algorithmic trading on November 2, one day before the Fall 2015 STAC Summit, and two days before the start of the FIA Futures and Options Expo, both in Chicago. The IIT event will feature keynote speaker Craig M. Lewis of Vanderbilt University’s Owen School of Management as well as James Overdahl, former chief economist at both the SEC and the CFTC, along with a range of academic and industry experts.
Watch the video »

The pitfalls of trading derivatives in Asia
FTSE Global Markets
The derivatives of markets of Asia are the destination of choice for many firms. Nonetheless, bear traps remain for the unwary, warns Lewis Richardson, Derivatives Business Development Manager at Fidessa.

****** Pitfalls are better than pratfalls.


Lead Stories

Exchanges, Schwab criticize SEC market structure committee
The New York Stock Exchange, Nasdaq and brokerage Charles Schwab Corp have criticized a committee the U.S. Securities and Exchange Commission formed to advise on the equity market’s structure.
In a joint letter sent to the SEC on Tuesday, the three said the body lacks representatives from a wide swath of market participants, including from non-financial public companies, individual investors, exchanges or retail broker-dealers.

New OIC Study Shows Increased Knowledge of Listed Options by Investors
The Options Industry Council (OIC), the educational cooperative run by OCC, the world’s largest equity derivatives clearing organization, and the U.S. options industry, today released the results of a new study conducted by Harris Poll that shows that industry efforts to educate investors about the use of listed options are generating positive results.

SEC signals tighter rules governing Treasury bond market
Robin Wigglesworth, US Markets Editor – FT
US regulators and policymakers want to improve transparency and tighten rules governing the $13tn Treasury bond market, particularly ramping up supervision of high-frequency trading firms, amid rising concern over the stability of US government debt.

LME wants China to have price-setting input
Neil Hume, Commodities Editor – FT
The London Metal Exchange wants China to play a bigger role in setting prices and will work with a group of Chinese banks and brokers to encourage greater participation in its market, the biggest and oldest for industrial metals.

World Federation Of Exchanges: Global Exchanges Publish Position Paper On Key CCP Risk Management, Recovery And Resolution Issues
The World Federation of Exchanges has published a position paper, setting out the views of global market operators and CCPs at its Annual Meeting in Doha, Qatar.

Shareholder Activism Expert, Regulatory Critic Nominated for SEC; Fairfax, Peirce are tapped by Obama administration for Securities and Exchange Commission
The Obama administration tapped a Democratic expert on shareholder activism and a Republican critic of recent regulation to fill two vacancies on the Securities and Exchange Commission, underscoring the ideological divide that has at times paralyzed the agency in recent years.

Citadel joins LCH.Clearnet’s swaps clearing house
Joe Rennison,
Citadel has become a direct clearing member for interest rate swaps, continuing the Chicago-based hedge fund’s charge to disrupt the dealer-dominated business. Citadel Securities, the market-making arm of the firm, will become the first non-bank clearing member of LCH.Clearnet’s SwapClear, the largest clearing house for interest rate swaps.

Regulators Reviewing Steps to Address Treasury Market Volatility; SEC’s Mary Jo White says agency could subject venues for trading government bonds to new oversight
Regulators analyzing sharp moves in the $12.8 trillion U.S. Treasury market are reviewing a series of steps and potential rule enhancements to safeguard the integrity of what has long been the world’s most liquid securities market.

Global Exchanges Publish Position Paper on Key CCP Risk Management, Recovery and Resolution Issues
World Federation of Exchanges
The World Federation of Exchanges has published a position paper, setting out the views of global market operators and CCPs at its Annual Meeting in Doha, Qatar.
The paper says that a prescriptive ‘one-size-fits-all’ approach to CCP oversight is not the most effective way to manage risk in the system. Given their market expertise and robust safety record, CCPs should continue to retain the flexibility to design and enhance their own risk management tools as has been the case to date.

Hedge Fund Assets Decline by Biggest Amount Since Financial Crisis
For years, the hedge fund industry attracted billions of dollars as investors searched for higher returns. But over several rocky months, managers reversed their gains for the year, investors headed for the exit and some firms shut down.

China securities regulator taps Stanford graduate Fang Xinghai for role
Gabriel Wildau in Shanghai – FT
A respected financial industry veteran with a doctorate from Stanford University is set to serve as vice-chairman of China’s securities regulator, as the agency seeks to repair damage inflicted to its reputation by its handling of stock market volatility this summer, local media reported on Wednesday.

FX players divided on market structure
by Farah Khalique – Euromoney
Foreign-exchange market participants are warming to the idea of exchange-like trading and abolishing outdated market practices such as last look – but banks and non-bank players still cannot agree on the future landscape of FX, according to a survey published by LMAX Exchange.

Banks say new rules will double capital needed to cover securitised debt; Banks say new rules would quadruple overall capital needs; Basel says most banks unaffected by new rules
By Huw Jones – Reuters
Banks will have to double the amount of capital they hold to cover possible default on their pooled-debt under planned new global rules, they said on Tuesday, potentially hampering the EU’s drive to boost market-based financing for the economy.


The Most Diverse S.E.C. Ever May Be Taking Shape
President Obama on Tuesday announced he would nominate Lisa M. Fairfax to be a commissioner to the Securities and Exchange Commission, elevating a law professor who has studied shareholder activism after progressive groups lobbied intensely against naming a Wall Street insider.

Remarks of Chairman Timothy Massad before the Conference on the Evolving Structure of the U.S. Treasury Market

Community Banks Have Bigger Problems than Regulation
Mayra Rodriguez Valladares – Bank Think
The challenges small banks are facing these days go well beyond the impact of regulations. At the Omaha conference, speakers identified four other areas of concern that, in my view, are even bigger challenges for small banks. They are: managing interest rate risk when the Federal Reserve eventually raises rates; the impact of a weakening global economy; a lack of diversity in their boardrooms and C-suites; and succession planning.

Wenchi Hu, Christian Sabella Named Associate Directors in the Division of Trading and Markets
The Securities and Exchange Commission today announced that it has named Wenchi Hu and Christian Sabella as Associate Directors in the Division of Trading and Markets’ Office of Clearance and Settlement.

***DA: She also played first base in the famous Abbott & Costello routine.

MiFID II – the road ahead – Financial Conduct Authority
Speech by David Lawton, Director of Markets Policy and International, FCA, delivered at the FCA MiFID II Conference, London. This is the text of the speech as drafted, which may differ from the delivered version.

Exchanges & Trading Facilities

CME, CCB to offer offshore Chinese renminbi futures contracts deliverable in London; CME Group, CCB sign memorandum of understanding; USD/CNH, EUR/CNH contracts to be deliverable in London
By Jan Harvey – Reuters
Options and futures exchange operator CME Group and China Construction Bank will begin the physical delivery of renminbi for new futures contracts in London, CME Group said in a statement on Monday.

LME wants China to have price-setting input
Neil Hume,
The London Metal Exchange wants China to play a bigger role in setting prices and will work with a group of Chinese banks and brokers to encourage greater participation in its market, the biggest and oldest for industrial metals.

CME Group revises daily price limits for grains from November
Daily price limits for Chicago Board of Trade corn, wheat and soybean futures will see a decline from November following a semi-annual review, the CME Group Inc , parent of the exchange, said on Tuesday.

SGX reports net profit growth for Q1 FY2016 and highlights business priorities
SGX today announced net profit of $99 million, up 28% year-on-year for Q1 FY 2016, following growth in all businesses apart from Issuer Services. Revenue was up 30% to $220 million. The Board of Directors has declared an interim dividend of 5 cents per share, up from 4 cents per share, payable on 5 November 2015.

Are exchange checks the answer to systemic risk?
Guy Warren – Futures & Options World
How can exchange system monitoring help protect the markets, and the reputational, regulatory and revenue drivers for exchanges and trading venues?
Do you remember the famous Honda advert a few years ago, known as ‘The Cog’? One small initial movement, through a fascinating series of complicated mechanisms, can result in a much larger result – like moving a car. But they can be incredibly fragile. Move one piece of the puzzle ever so slightly out of position and the machine breaks down. The lesson is that in a complex system, even a small event can contribute to catastrophe.
In the intricate financial services world – and for exchanges and trading venues especially – tackling such systemic risk has been one of the biggest priorities in recent years and it’s essential that venues monitor their technology for potential problems.

ISE Signs Memorandum Of Understanding With Korea Exchange
The Irish Stock Exchange (ISE) has signed a Memorandum of Understanding (MOU) with the Korea Exchange (KRX) which aims to foster a long term relationship between the exchanges.

BME To Launch New Transparency Services Under MiFID II – It Will Apply To Operate As An “Approved Publication Arrangement” (APA)
BME is to launch new transparency services to help market participants to comply with MiFID II’s regulatory requirements, which will enter into force in 2017.

Hedge Funds & Managed Futures

Hedge funds suffer biggest quarterly drop in assets since 2008: data
Hedge funds suffered their biggest quarterly loss in assets since the financial crisis during the three months that ended in September, data released on Tuesday showed, putting the industry on track for its worst year since 2008.

You might be losing money by trying to follow this Wall Street adage
Charles Hugh Smith, The Daily Reckoning via Business Insider
“I just want to figure out how to buy low and sell high!”
I was out grabbing a bite last week when I overheard an exacerbated man at an adjacent table air his dirty investing laundry to his buddy.

IPO market faces worst October in 4 years
By Mark DeCambre – MarketWatch
The bubbly IPO market is losing air fast.
The formerly bubblicious market for initial public offerings is starting to go flat.

Bridgewater’s $70 bln ‘All Weather Fund’ down 6 pct in 2015 – sources
By Jennifer Ablan – Reuters
The $70 billion Bridgewater All Weather Fund, managed by hedge fund titan Ray Dalio, was down 1.9 percent in September and is down 6 percent through the first nine months of the year, three people familiar with the fund’s performance said on Tuesday.

Archer Daniels Midland increases stake in Wilmar
U.S. grains trader Archer Daniels Midland Co has increased its stake in Wilmar International Ltd of Singapore in its latest bid to expand in Asia.

Man GLG launches hedged share class for European fund; Follows significant investor demand
Natalie Kenway- InvestmentWeek
Man GLG has launched a hedged share class for its Continental European Growth fund for those investors who do not want exposure to the euro.

Banks & Brokers

FX players divided on market structure
Euromoney magazine
Foreign-exchange market participants are warming to the idea of exchange-like trading and abolishing outdated market practices such as last look – but banks and non-bank players still cannot agree on the future landscape of FX, according to a survey published by LMAX Exchange.

Barclays joins list of banks seeking ringfencing waiver
Martin Arnold and Caroline Binham – FT
The queue of banks planning to ask the UK regulator for a waiver on its “ringfencing” rules keeps growing.

U.S. judge rules Goldman must defend Tibco sale lawsuit
BY TOM HALS – Reuters
A U.S. judge ruled on Tuesday that Goldman Sachs Group Inc must defend a class action over its role in the 2014 sale of Tibco Software Inc, the latest ruling against a Wall Street bank over a corporate deal.

Interactive Brokers Group Announces 3Q2015 Results
Interactive Brokers Group
Interactive Brokers Group, Inc. (NASDAQ GS: IBKR) an automated global electronic broker and market maker, today reported diluted earnings per share on a comprehensive basis of $0.23 for the quarter ended September 30, 2015, compared to a diluted loss per share on a comprehensive basis of $0.13 for the same period in 2014.

Fat finger trades — Deutsche joins league of market mistakes
FT reporters – FT
News that a junior banker at Deutsche Bank accidentally transferred $6bn to a single hedge fund customer in a “fat finger” trade is an embarrassing blow to the German bank. However, Deutsche has company in the fat-finger trading league.

Jon Simblist Joins Convergex’s Options Team as Convergex Sets Another One-Day Options Trading Volume Record
Convergex, an agency-focused global brokerage and trading related services provider, is pleased to announce that Jon Simblist has joined Convergex’s Options team as Managing Director and will oversee Convergex’s buy-side institutional sales initiatives as well as focus on options trading strategies. An industry veteran, Mr. Simblist most recently worked at Instinet where he was head of electronic derivative sales. In addition, Simblist has a strong background in options trading and technology as well as creating and implementing trading solutions in listed options for hedge funds, asset managers, banks and broker dealers.

COEX parts ways with US head Andrew Totman
Luke Jeffs – Futures & Options World
British broker COEX Partners has parted company with its US head Andrew Totman who has left the firm in Chicago to join ED&F Man, a rival broker that has been working with COEX.
Totman, a vastly experienced futures broker, joined the Chicago-based arm of ED&F Man last month after nearly two years running COEX Partners’ US business in Chicago, according to sources.

Perella Weinberg Sues Former Partners Over Rival Venture
By MICHAEL J. de la MERCED – NY Times
The boutique investment bank Perella Weinberg Partners sued four of its former partners on Tuesday, formally accusing them of trying to form a rival corporate restructuring shop while still employed by the firm.

JPMorgan Is Said to Be Near Deal to Spin Off Private Equity Unit
JPMorgan Chase is close to completing a deal to spin off a large private equity unit that has operated within the bank, a person briefed on the deal said on Tuesday.

Clearing & Settlement

DTCC: redefining post trade services for a riskier world
FTSE Global Markets
Several years ago, The Depository Trust & Clearing Corporation (DTCC) outlined a new business strategy that at its heart envisioned a much larger role for itself. That role involves sometimes simple, sometimes complex multi-tasking in its approaches to helping the financial industry deal with today’s realities: new and increased regulation, the impact of globalisation, new business processes and the requirement to minimise market risks and lowering the costs of securities transactions. How far has DTCC achieved its aim of becoming a global super-utility? What are the next steps? FTSE Global Markets spoke to Michael C. Bodson, president and chief executive of DTCC about the post-trade giant’s strategy and global outlook.

Clearing obligation for derivatives
International Law Office
The Federal Act on Financial Market Infrastructures has introduced a new regulatory framework for over-the-counter (OTC) derivatives transactions. In line with recognised international standards (in particular, the European Market Infrastructure Regulation), the Federal Council and the Swiss Financial Market Supervisory Authority (FINMA) have recently published draft versions of their implementing rules (ie, the Financial Market Infrastructure Ordinance and the FINMA Financial Market Infrastructure Ordinance), which regulate the clearing obligation in more detail and define the criteria according to which derivatives are subject to a clearing obligation. The clearing obligation is expected to enter into force in 2016.

LCH.Clearnet LLC appoints Christine Cumming to board of directors
Automated Trader
LCH.Clearnet Group has announced that Christine Cumming has been appointed to the Board of Directors of LCH.Clearnet LLC, the Group’s US-based entity. Christine serves as an independent non-executive director and also as a member of the Risk Committee.

Indexes & Products

New Cash-Settled Options on Russell 1000 Indexes – Large-cap, Growth and Value
CBOE Options Hub
On October 20 CBOE launched new cash-settled options on three indexes –

  • Russell 1000 Index (RUI) – is preferred by many investment managers as a broad-based index that represents approximately 92% of the total U.S. equity market.


  • Russell 1000 Growth Index (RLG) – measures the performance of those Russell 1000 companies determined to have higher price-to-book ratios and higher forecasted growth values.


  • Russell 1000 Value Index (RLV) – measures the performance of those Russell 1000 companies determined to have a lower price-to-book value and lower expected growth values.

How to Buy Stocks When the Dollar is Strong
US News
One of the big problems for companies that have large overseas operations is that a stronger dollar makes those foreign sales look smaller. S&P Dow Jones Indices estimates that slightly less than half of sales for Standard & Poor’s 500 index stocks come from outside the U.S. So when the greenback is stronger, sales and earnings of foreign-focused companies start to wither – typically it’s not something that Wall Street looks favorably on and share prices of the companies affected can get hammered.

FTSE Russell and JSE revitalise their SRI index series with new launches
ETF Strategy
FTSE Russell, a global index provider, has reunited with the Johannesburg Stock Exchange (JSE) to update the existing FTSE/JSE Africa Index Series. The collaboration involves the launches of the FTSE/JSE Responsible Investment Benchmark and a Top 30 Index, replacing JSE’s existing socially responsible investment index. These indices may be used as a reference for future tracking assets such as exchange-traded funds.

MSCI to report carbon footprint of all global equities indexes
IR Magazine
Index provider MSCI will start publicly reporting the carbon footprint of its more than 160,000 global equities indexes to meet growing demand from investors following SRI strategies worldwide, the company says.

STOXX Limited, a leading provider of innovative, tradable and global index concepts, today announced that the iSTOXX MUTB Japan Quality 150 Index has been licensed by Mitsubishi UFJ Kokusai Asset Management (MUKAM) to underlie a passive index fund. The new fund will be geared toward retail investors and expected to launch in November 2015.


FIX Trading Community Announces Revised Guidelines On Execution Analysis In EMEA
FIX Trading Community, the non-profit, industry-driven standards body at the heart of global financial trading, today announce that it has produced EMEA specific guidelines on Execution Venue Analysis. These latest revisions focus on adding further clarity around Last Capacity and Liquidity flag definitions, as well as mandating all executing venues, including broker crossing and alternative trading systems, to supply valid Market Identifier Codes (MICs) on their executions.

VCs scramble to cash in on fintech boom
Dealstreet Asia
Venture capital (VC) investments in fintech, or start-ups in the financial technology area, have seen a threefold increase over the last year as investors seek to cash in on potentially disruptive technologies shaping a cashless economy.

Oracle launches product to help banks go digital
Enterprise Innovation
Oracle has announced the availability of Oracle Banking Digital Experience, a new solution that aims to help banks deliver end-to-end digital experiences while leveraging their existing IT infrastructure investments including their core banking systems.

Broadridge Expands EMEA Team to Support Global Financial Institutions
Broadridge Financial Solutions, Inc. has hired three senior executives to its London office to expand the firm’s support for global financial institutions in key market-centers internationally. The executives – Kimberly Jewell, Mike Thrower and Peter Morris – bring decades of experience in banking and brokerage operations, client relationship management, sales and technology.

Bringing Silicon Valley to India
The Financial Express
There are numerous Silicon Valley firms that have innovated in all aspects of business software, but these firms were not the ones that seemed to get any mention, let alone headlines, during PM Modi’s visit to Silicon Valley

U.S. Senate considers controversial cyber security bill
By Patricia Zengerle – Reuters
The U.S. Senate on Tuesday began debating a long-delayed bill that would make it easier for corporations to share information about cyber attacks with each other or the government without concern about lawsuits.


CFTC Orders BNP Paribas Securities Corp. to Pay a $140,000 Penalty to Settle Charges of Improper Investment of Customer Segregated Funds
The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order instituting and simultaneously settling charges against BNP Paribas Securities Corp. (BNPP), a registered Futures Commission Merchant (FCM) based in New York, New York, for violating the CFTC’s Regulations governing concentration limits applicable to the investment of segregated commodity customer funds. The CFTC Order requires BNPP to pay a $140,000 civil monetary penalty and to cease and desist from violating CFTC Regulations, as charged. The Order also requires that BNPP must regularly review its policies and procedures and provide training to ensure compliance with applicable regulations.

Federal Court in Ohio Orders over $31 Million in Restitution and Civil Monetary Penalties for Commodity Pool Operator and Commodity Trading Advisor Fraud and Ponzi Scheme
The Orders require Bullar and EMA to pay civil monetary penalties totaling more than $24.8 million for their fraud, misappropriation, embezzlement, and operation of a Ponzi scheme, while illegally acting as Commodity Trading Advisors (CTAs) and Commodity Pool Operators (CPOs) without registering as such with the CFTC. The Orders also impose permanent trading and registration bans on the Defendants and prohibit them from further violations of the Commodity Exchange Act, as charged.

Alan James Watson, Cash Flow Financial LLC, and Michael S. Potts Ordered to Pay More than $91.9 Million in Final Disposition of Commodity Pool Ponzi Scheme Case
The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge Mark A. Goldsmith of the U.S. District Court for the Eastern District of Michigan entered an Order requiring Defendant Alan James Watson of Clinton Township, Michigan, to pay $37,224,928.82 in restitution and a $27 million civil monetary penalty, plus interest on both amounts, for his role in operating a commodity pool Ponzi scheme. Previously, on January 5, 2012, the Court had entered a Consent Order against Watson, banning him from trading in, or participating in transactions involving, commodity futures or options, swaps, and foreign currency exchange (forex).

French bank will pay $787M to settle US sanctions violations
US News
A large French bank has agreed to pay more than $787 million to settle legal problems stemming from U.S. sanctions violations, officials announced Tuesday. Credit Agricole processed more than $32 billion in payments through its New York branch between 2003 and 2008 on behalf of Sudanese, Iranian, Burmese and Cuban entities, according to New York Financial regulators. The dollar clearing was done through its New York branch from its branches in Paris, London, Singapore, Geneva, Hong Kong and the Gulf, they said.

Credit Agricole says provisions to cover U.S. fine
French bank Credit Agricole said on Tuesday it would pay $787 million in sanctions-busting fines agreed with U.S. authorities from existing provisions, with no further effect on its accounts in the second half of the year.

Environmental & Energy

World Leaders Urge Global Carbon Pricing
Global carbon pricing is an idea whose time has come, heads of government said in a joint declaration today, urging their peers to set up carbon markets and tax carbon emissions ahead of climate talks in Paris in December. For the first time, a statement urging countries and businesses around the world to put a price on carbon was issued by national leaders from Europe, Africa, Asia, South and Central America, in an effort to control dangerous climate change.

Jim Chanos Says Pain from Oil’s Fall Will Get Worse
Noted short seller James Chanos says the effects from the precipitous drop in oil prices are just beginning to be felt.

Minecraft for Energy Wonks: This Game Puts You in Control of America’s Climate Headaches; Think you’ve got a solid climate fix? Think again.
Eric Roston – Bloomberg
When it comes to energy problems, everyone has messianic aspirations for the solution they prefer. If you believe in solar, you probably think panels alone will save the world. Work for a coal company? You are certain that generators can keep America’s lights on. There are carbon-tax diehards. And somebody, somewhere, probably thinks elevator lighting standards for commercial buildings can save the planet.

U.S. Said to Engage in Talks on Carbon Market Rules
By Mathew Carr – Bloomberg News
The U.S. is engaged in talks on setting international rules and guidelines for carbon trading in the event that United Nations climate talks fail to set a framework for such a system, according to a person with direct knowledge of the plan.

Europe’s greenhouse gas emissions fall to record low
By Arthur Neslen – The Guardian
Greenhouse gas emissions in Europe have plunged to the lowest level ever recorded after the EU’s member states reported an estimated 23% drop in emissions between 1990 and 2014.


Hong Kong’s distinct advantage is freedom, but for how long?
Hong Kong Free Press
In truth, the only thing that sets Hong Kong apart is freedom. Although it is now under serious threat, we still have more freedom than Singapore and Mainland cities. For instance, Hong Kong outperformed both the PRC and Singapore in terms of civil liberty (according to the Freedom in the World Territory Ratings 2015 published by Freedom House) and in terms of press freedom (according to the 2015 World Press Freedom Index published by Reporters Without Borders).

China’s Economic Numbers: How Real?
Chinese economic numbers have about as much credibility as Noah Cross, the villain in the movie Chinatown. The character is based upon? ?the real-life first superintendent of the Los Angeles Water? ?Department, William Mulholland.

Frontier Markets

Why ‘FinTech’ could be crucial for African economies
Mobile payments have revolutionized the financial industry in Sub-Saharan Africa, where more than two thirds of people have a cellphone, but only around one-third have bank accounts. Cash is still king in the region, and the financial architecture of bank branches, payment cards and transfer services that are ubiquitous in the West are lacking.

Africa’s commodities slump is a gold mine for investors
The recent downturn in Africa’s commodities markets might seem to signal dark times for the continent’s emerging economies. The slump in global oil prices prompted Angola’s government to end fuel subsidies; weak copper rates dramatically reduced the value of Zambia’s currency; and J.P. Morgan delisted the Nigerian naira from the Emerging Markets Bond Index.

Testing the resilience of Qatar’s markets
FTSE Global Markets
Despite the plunge in oil prices, Qatar has held up relatively well in the current rout in emerging market stocks. Although with the exception of the FTSE upgrade, there remains a lack of immediate catalysts for Qatari stocks, even so Qatar maintains its edge as the government continues to spend freely, even as energy prices remain depressed. Does positive thinking about the kingdom’s prospects have legs?

Sebi issues new risk management norms for regional comexes; Minimum ordinary margins of 4% has been prescribed and levy of other Business Standard
Securities and Exchange Board of India today issued new set of regulations for regional commodities exchanges. At present three such exchanges are active. Most of the regulations are relating to margins and exchanges shall implement them by 1st of April 2016.

BSE identifies brokers using algorithm trading, asks for system audit reports; The preliminary audit reports would have to be submitted by November 30
Press Trust of India
BSE today said it has identified brokers using algorithm (algo) based trading and asked them to submit system audit reports for the first half of the fiscal.

FTIL to sell 1.58% stake in IEX to Madison India for Rs 34 crore
Economic Times
Financial Technologies today said that it has entered into an agreement with Madison India for sale of 1.58 per cent stake in Indian Energy Exchange for Rs 33.96 crore.


HOW AN F STUDENT BECAME AMERICA’S MOST PROLIFIC INVENTOR; Lowell Wood broke Edison’s patent record and helped bring down the Soviet Union
by Ashlee Vance – Bloomberg
“It’s really a one-person sort of vehicle,” says Lowell Wood, right after he offers me a lift back to my hotel. His brown 1996 Toyota 4Runner, parked outside his office building in Bellevue, Washington, has 300,000-plus miles on the odometer and looks it. Garbage bags full of Lord-knows-what take up most of the back. He squeezes his paunchy, 6-foot-2-inch frame behind the wheel and, using his cane, whacks away papers, more bags, and an ’80s-vintage car phone to clear some room on the passenger side. The interior smells like pet kibble. Wood puts the keys in the ignition and then spends half a minute jiggling them vigorously until the truck finally starts. As we pull away, I wonder aloud if all the detritus crammed in his SUV could be from a hobby. “No, I don’t have time for any of that,” Wood says. He adds that he’s not terribly good with the ordinary aspects of life—paying bills, say, or car washing. He’s too consumed with inventing solutions to the world’s problems. Ideas—really big ideas—keep bombarding his mind. “It’s like the rain forest,” he says. “Every afternoon, the rains come.”

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