First Read

Orc Group Holding AB´s owner Cidron Delfi Intressenter Holding AB acquires Tbricks AB

Orc Group

Orc, a global leader in derivatives trading technology, today announced that Orc Group Holding AB´s owner Cidron Delfi Intressenter Holding AB (a company indirectly controlled by Nordic Capital Fund VII) has signed an agreement to acquire 100% of the shares in Tbricks. The intention is to transfer the ownership to Orc Group AB, which will occur once consent has been obtained from SEB according to the terms in Orc Group´s loan agreement with SEB.

Tbricks, founded in 2006, provides market makers, proprietary traders and banks with sophisticated technology for trading. Tbricks has customers across Europe and the US and offices in Chicago, London, Stockholm and St Petersburg, Russia.

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**** Orc Group starts the new year with a BANG!

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Ronald Li, ‘Godfather’ of HK exchange, dead at 85

Josh Noble in Hong Kong, FT

Hong Kong can fairly claim to be the most stock market-obsessed place on earth. New mobile phones come ready with software enabling share and options trading at the swipe of a thumb, while in the windows of high street banks are live prices for the territory’s most traded companies. This is the legacy of Ronald Li, who died this week aged 85.

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***** The Godfather of the HK exchange also had served some time. Interesting story.

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Checks and Balances: James Koutoulas Seeks NFA Board Transparency and Balance in Re-election Bid

JohnLothianNews.com

This year’s election for the board of directors of the National Futures Association is underway. John Lothian News spoke with several of the candidates, including commodity trading advisor and Commodity Customer Coalition co-founder James Koutoulas, who looked at reforming the association when first elected to the board two years ago.

Koutoulas, CEO of Typhon Capital Management, founded the CCC along with John Roe in the wake of the MF Global bankruptcy in October 2011. Roe and Koutoulas were elected to the NFA in 2013, representing the CTA/CPO category, and now face re-election in a contested election. Koutoulas is running in a three-way race against George Berbeco and Bernard Denis, III.

Watch the video »

***DA: In case you missed the flap between the NFA and Mr. Koutoulas, here is a link to Wednesday’s commentary

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Unfinished Business: John Roe Asks for Two More Years on the NFA Board of Directors

JohnLothianNews.com

This year’s elections for the board of directors of the National Futures Association is underway. John Lothian News spoke with several of the candidates, including commodity trading advisor and Commodity Customer Coalition co-founder John Roe, first elected to the board two years ago pledging reform.

“When I ran for the board of directors two years ago,” says Roe, “we set out to accomplish a few things with regard to customer protections and increasing regulatory efficiency. Two years just simply is not enough time to get all of that done, and I feel we have a lot more to accomplish.”

Watch the video »

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Refreshing Your Brand Leads to Career Success; Executives Should Look to Burnish Their Reputations When Necessary

By Joann S. Lublin – WSJ

Quick: how would a professional acquaintance describe you to others? Savvy project manager? Collaborative leader? Digital whiz?

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***** People normally refer to me as tall. I am hoping for skinny again in 2015.

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French Economist Thomas Piketty Refuses Legion of Honor; In Snub, Best-Seller Author Said Government Should Reform Economy, Not ‘Decide Who Is Honorable’

By Inti Landauro – WSJ

French economist Thomas Piketty, author of the best-selling book “Capital in the Twenty-First Century,” has turned down the Legion of Honor, saying the government should focus on reviving the country’s anemic economy rather than “decide who is honorable.”

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***** He dissed the honor.

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To Rescue Economy, Japan Turns to Supermom

By Jonathan Soblejan, NY Times

When she was pregnant with the first of her three sons, Chiaki Kitajima, an advertising executive here, said her bosses were shocked that rather than accept reduced hours and a demotion after maternity leave, she made a presentation on why the company should subsidize child care.

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***** If certain parts of the world were to unleash the potential of women in their societies, productivity would increase greatly.

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Web Freedom Is Seen as a Growing Global Issue

By Vindu Goel and Andrew E. Kramerjan, NY Times

Government censorship of the Internet is a cat-and-mouse game. And despite more aggressive tactics in recent months, the cats have been largely frustrated while the mice wriggle away.

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***** Freedom is a growing global issue. Period.

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Lead Stories

Get Used to Cheap Oil

By Nicole Friedman, WSJ

Plunging oil prices in the second half of 2014 upended global economic forecasts, boosted consumer spending and roiled markets from Moscow to Midland, Texas.

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OCC Announces Officer Promotions

OCC

OCC announced seven officer promotions today including some as part of a reorganization supporting the company’s efforts to meet the heightened expectations of regulators and market participants for systemically important clearing houses like OCC.

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Identifying market faultlines for 2015

Ralph Atkins — London, FT

Where are the faultlines in financial markets? What could trigger the biggest upsets in 2015? Investment strategists have long lists of potential worries — from central bank missteps, to oil shocks, geopolitical and political risks, or simply excessive exuberance.

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The Oil Price Decline: No Conspiracy Theories Need Apply

Streetwise Professor

2014 is in the books, and fittingly the last day of the year saw a fall in the price of oil. The nearly 50 percent decline in oil prices from the end of June to today was the biggest commodities story of the year. This decline has spawned numerous conspiracy theories, which like most conspiracy theories, are pure bunk.

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Egypt proves best destination for stock market investors

Andrew Bolger, FT

Egypt was 2014’s best destination for stock market investors, producing a total return including dividends and share price rises of more than 30 per cent in a year in which the US led equity rallies in developed economies.

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System to share loan data has wide appeal

Tracy Alloway, FT

Inventor aimed to add information to assets as they changed hands

Transparency is rarely the name of the game on Wall Street, where there are large sums of money to be made by arbitraging informational advantages. This goes some way towards explaining the uphill battle faced by tech pioneers such as Michael Erlanger.

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Regulatory

CBOE Regulatory Circulars

CBOE

Fee Changes for Floor Broker Workstation (“FBW”) and Floor Broker Workstation 2 (“FBW2”)

Prearranged Trades

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Frontloading certainty paves way for EU clearing mandate

derivatiViews – from the executive office of ISDA

The first clearing obligations are already in place in the US and Japan, and the European Union is now set to follow with its first mandates next year. One of the sticking points has been the fine-tuning of the frontloading requirement – a rule unique to Europe that essentially requires certain trades conducted before the clearing obligation comes into effect to be subsequently cleared.

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***DA: The rule sounds much less complex than it is.

The Year in White-Collar Crime

By Peter J. Henning, NY Times

White-collar crime cases can take years to develop, so today’s headlines often reflect what happened well in the past. And as we approach the end of 2014, there is a sense, to steal a line from Yogi Berra, that it’s like déjà vu all over again.

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CFTC hints at new pragmatic approach to substituted compliance

Risk.net

Exemptive pathways and substituted compliance are core concerns for CFTC commissioner Mark Wetjen. He tells Risk.net that in many cases the commission is looking to take a common sense approach to enforcing its regulations, rather than insisting on the letter of the law In an interview with Risk.net at the Futures Industry Association conference in Singapore in December, Commodity Futures Trading Commissioner, Mark Wetjen, stressed the importance of encouraging harmonisation among global regulations.

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How to use FINRA Rule 4370 for business continuity management

by: Paul Kirvan, TechTarget

If you’re not familiar with FINRA Rule 4370, Paul Kirvan explains why you should know about this emergency preparedness rule for firms in the financial sector.

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Peru central bank tightens rules for derivatives, dollar deposits

Reuters

Peru’s central bank unveiled tighter rules for currency derivatives and created new reserve requirements for deposits in foreign currencies on Wednesday, part of a bid to curb lending in dollars and slow the greenback’s gains against the sol.

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Self-Regulatory Organization (SRO) Rulemaking and National Market System (NMS) Plans

BATS: Notice of Filing of a Proposed Rule Change to List and Trade Shares of the iShares U.S. Fixed Income Balanced Risk ETF of the iShares U.S. ETF Trust under Rule 14.11(i) (Release No. 34-73965; File No. SR-BATS-2014-056; December 30, 2014)

C2: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Fees for the C2 Book Depth Data Feed and Certain Other C2 Real-Time Data Feeds (“Release No. 34-73956; File No. SR-C2-2014-029; December 30, 2014”); see also Exhibit 5

FINRA: Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 1 Thereto, Relating to the Adoption of FINRA Rule 3110(e) (Responsibility of Member to Investigate Applicants for Registration) in the Consolidated FINRA Rulebook (Release No. 34-73966; File No. SR-FINRA-2014-038; December 30, 2014)

FINRA: Order Approving Proposed Rule Change to FINRA Rules 0190 (Effective Date of Revocation, Cancellation, Expulsion, Suspension or Resignation) and 2040 (Payments to Unregistered Persons) in the Consolidated FINRA Rulebook, and Amend FINRA Rule 8311 (Effect of a Suspension, Revocation, Cancellation, or Bar) (Release No. 34-73954; File No. SR-FINRA-2014-037; December 30, 2014)

MIAX: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Amend Its Fee Schedule (Release No. 34-73957; File No. SR-MIAX-2014-068; December 30, 2014); see also Exhibit 5

NASDAQ: Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Amend NASDAQ Rules 7014 and 7018 (Release No. 34-73967; File No. SR-NASDAQ-2014-128; December 30, 2014); see also Exhibit 5

NASDAQ: Notice of Filing of Proposed Rule Change Relating to the Listing and Trading of the Shares of the Tuttle Tactical Management U.S. Core ETF of ETFis Series Trust I (Release No. 34-73960; File No. SR-NASDAQ-2014-127; December 30, 2014)

NASDAQ: Order Granting Approval of Proposed Rule Change to Provide a New Optional Functionality to Minimum Quantity Orders (Release No. 34-73959; File No. SR-NASDAQ-2014-095; December 30, 2014)

NYSE: Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the Bylaws of the Exchange’s Ultimate Parent Company, Intercontinental Exchange, Inc., to Designate its Chief Strategic Officer, Chief Technology Officer and General Counsel as “Senior Officers” of ICE (Release No. 34-73962; File No. SR-NYSE-2014-67; December 30, 2014); see also Exhibit 5A, Exhibit 5B

NYSE Arca: Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the Bylaws of the Exchange’s Ultimate Parent Company, Intercontinental Exchange, Inc., to Designate its Chief Strategic Officer, Chief Technology Officer and General Counsel as “Senior Officers” of ICE (Release No. 34-73963; File No. SR-NYSEArca-2014-141; December 30, 2014); see also Exhibit 5A, Exhibit 5B

NYSE Arca: Notice of Filing of Proposed Rule Change Relating to Listing and Trading of Shares of the SPDR DoubleLine Total Return Tactical ETF under NYSE Arca Equities Rule 8.600 (Release No. 34-73958; File No. SR-NYSEArca-2014-143; December 30, 2014)

OCC: Notice of Filing of a Proposed Rule Change to Clarify that OCC would not Treat a Futures Transaction that is an Exchange-for-Physical or Block Trade as a Non-Competitively Executed Trade if the Exchange on Which Such Trade is Executed has Provided OCC with Representations That it Has Policies or Procedures Requiring That Such Trades be Executed at Reasonable Prices and That Such Price is Validated by the Exchange (Release No. 34-73961; File No. SR-OCC-2014-23; December 30, 2014)

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Exchanges & Trading Facilities

SGX Board Committee of Inquiry appoints independent experts

SGX

The SGX Board Committee of Inquiry (“BCOI”) has confirmed the appointment of the independent experts to assist the BCOI in its investigations into the 5 November 2014 breakdown, including the review of SGX’s technical, operational management and communications issues. Work by these independent experts commenced in December 2014 and they will submit their findings and recommendations subsequently to the BCOI. In view of the comprehensive nature of the review, the BCOI expects to submit its report to the SGX Board and the Monetary Authority of Singapore by end March 2015.

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Tight supplies drive CME live cattle to 6th straight yearly gain

By Theopolis Waters, Reuters

Chicago Mercantile Exchange live cattle futures posted their sixth consecutive yearly gain, closing out 2014 up 23.2 percent bolstered by the smallest herd in 63 years after several years of drought damaged corps.

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LME warehouse owners raise rents for aluminium as queues fall

Reuters

Warehouses registered by the LME will raise average rental rates for aluminium by 3.6 percent in 2015, more than double the increase for the previous year, partly offsetting the impact of falling load-out queues.

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Hedge Funds & Managed Futures

Stock Markets Hit High in 2014 as Bull Run Endured

By Peter Eavis, NY Times

An accelerating United States economy trumped problems overseas to lift the stock market to new highs in 2014.

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Comex silver futures end 2014 down 19.5 pct, 2nd straight yearly decline

Reuters

The most-active U.S. silver futures contract settled 4.2 percent lower at $15.60 per ounce on Wednesday, closing 2014 down 19.5 percent versus the end of 2013.

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Coffee Gains 50% for Year; Sugar Posts Four-Year Losing Streak; Brazilian Drought Helps Coffee Prices to First Yearly Gain in Four Years

By Leslie Josephs, NY Times

NEW YORK—Arabica coffee emerged as the biggest gainer among commodity-futures markets in 2014, as a drought in top grower Brazil propelled prices of the beans to their first yearly gain in four years.

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Snapchat valued at $10bn in fundraising

Tim Bradshaw in Santa Barbara, FT

Snapchat has closed a $486m round of funding, the secretive photo-messaging start-up quietly disclosed in a regulatory filing on New Year’s Eve.

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Deal Makers Notched Nearly $3.5 Trillion Worth in ’14, Best in 7 Years

By Michael J. de la Merced, NY Times

By almost every measure, 2014 was a time for deal makers to pop the corks of their Champagne bottles.

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Good Times Teach Only Bad Lessons

by Joshua M Brown

I don’t mean to start 2015 off on a sour note, but there’s something I should say – particularly for the benefit of my younger readers and for those who are newer to investing. As the Howard Marks quote above illustrates, enduring pain in the markets provides the very best lessons we can learn as investors. The trouble is, it’s been awhile since we’ve been able to learn anything useful.

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Activists Are on a Roll, With More to Come; They Reached New Heights in 2014, Cementing Position as Force in U.S. Boardrooms

By David Benoit

Shareholder activists targeted sellers of everything from breadsticks to Botox in 2014.

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Broken Deals Rein In a Strong M&A Market; Last Year Was a Good One for Takeovers, Despite Some Abortive Attempts

By Shayndi Raice

One of the best years ever for mergers and acquisitions could have been even better.

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Red Kite Flies High in Copper Market; U.K. Hedge Fund Seen by Traders and Brokers as Sitting on Significant Stores of the Metal

By Ira Iosebashvili, Ese Erheriene and Tatyana Shumsky, WSJ

When a mystery buyer started snapping up tons of the world’s copper last year, it didn’t take long for many fingers to point to a small but aggressive hedge fund.

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After Banner Year, IPO Parade Marches On; Despite Headwinds, Market Hopefuls Line Up for Debuts

By Telis Demos, WSJ

The U.S. IPO market in 2014 enjoyed its best year in more than a decade, thanks in part to Alibaba Group Holding Ltd. ‘s record $25 billion debut. But given the lack of another blockbuster deal on the horizon, an anticipated interest-rate increase and the recent tumble in energy prices, some slowdown in 2015 looks inevitable.

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Aberdeen suffers big outflows in 2014

David Oakley, Investment Correspondent, FT

Aberdeen Asset Management was the big loser of 2014 in the UK and European investment industry as it suffered more than $12bn of outflows from investor fears about emerging markets and the growing popularity of cheap tracker funds.

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Banks & Brokers

Goldman top bankers lead UK pay league with £3m packages

Kate Allen, FT

Top bankers at Goldman Sachs were the best-paid among their peers in Britain in 2013, according to new regulatory filings.

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Corbat’s Quest for Boring Clashes With Citigroup Trading Push

Bloomberg

Michael Corbat, chief executive officer of the New York-based bank, extended his reach into commodities trading as other firms retrenched, kept a proprietary trading desk that takes a looser approach to new rules than some competitors and expanded the company’s derivatives business to make it the nation’s second-largest. At the same time, he has sold or plans to sell consumer units in 19 countries from Japan to Peru.

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Clearing & Settlement

Payment vs payment settlements in FX to result in risk reduction: R Sridharan

Business Standard

Interview with Managing Director, CCIL

The Clearing Corporation of India (CCIL), which provides institutional infrastructure for the clearing and settlement of transactions in government securities (g-sec), money market instruments, foreign exchange transactions, and derivatives in the over-the-counter (OTC) market, plans to introduce new measures in 2015. R Sridharan, managing director of CCIL, talks to Neelasri Barman and Sachin Mampatta about the plans.

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Indexes & Products

Why the Dollar Index is no longer key measure of risk aversion

Economic Times

The movement of the dollar index, a trade weighted index of the six most traded currencies globally, is losing significance as a key gauge for measuring risk aversion among global investors in Indian equities and the investment outlook in global risky assets.

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Technology

Cyber security groups use fake computers to trap hackers

Hannah Kuchler in San Francisco, FT

A new breed of cyber security company is trying to lay traps to catch hackers and prevent damage, as old ways of preventing attacks are failing.

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Brokers caught in tech race

The Australian

THE rise of specialist high-frequency traders is displacing traditional mid-tier brokerages in equities market share.

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Environmental & Energy

Scientists Alter Crops With Techniques Outside Regulators’ Scope

By ANDREW POLLACKJAN, NY Times

Its first attempt to develop genetically engineered grass ended disastrously for the Scotts Miracle-Gro Company. The grass escaped into the wild from test plots in Oregon in 2003, dooming the chances that the government would approve the product for commercial use.

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Energy Partnerships Lose Allure as Oil Prices Fall

WSJ

Share Prices, Generous Payouts of Drilling MLPs Are Under Increasing Pressure

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Linn Energy cuts 2015 capital budget by 53 pct

Reuters

Linn Energy LLC cut its 2015 capital budget by 53 percent to $730 million, joining other oil and gas producers in reducing expenditure in response to falling oil prices.

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Asia-Pacific

Macau gambling revenues hit by China graft campaign

Josh Noble in Hong Kong, FT

Macau’s gaming sector suffered its first annual decline in revenue last year, as Beijing’s anti-corruption drive dented spending by wealthy individuals.

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Frontier Markets

Bankers, regulators to discuss ways to revitalise banking sector

Business Standard

Meet to deliberate on host of issues including merger and acquisitions and bad assets

Over 100 senior bankers, insurers, financial sector regulators and finance ministry officials would attend the two-day meet here beginning tomorrow to deliberate on host of issues including merger and acquisitions and bad assets to revitalise the banking sector.

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Managing Director Lahore Stock Exchange Congratulated The Newly Elected Office Bearers Of Lahore Economic Journalists Association For The Year 2015

MondoVisione

Managing Director and Chief Executive Officer of the Lahore Stock Exchange Aftab Ahmed Chaudhry Congratulated newly elected Lahore Economic Journalists Association (LEJA) for the year 2015 President Muhammad Riaz, Vice President Ahsan Siddique, Secretary General Amir Naveed Chaudhry, Finance Secretary Jahangir Hayat and Members of Executive Commottee Fakhir Malik, Mansoor Bukhari, and Mian Khalilur Rehman.

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Banks’ steady progress of a decade impeded by slowdown

Business Standard

India’s banking sector has made a significant progress in the past decade but slow economic activity has taken a toll since 2011

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Securites and Exchange Board of India Notices

Adjudication Order against Techno Shares & Stocks Pvt. Ltd in the matter of Valecha Engineering Limited

Adjudication Order against Shri Rajesh Pradhan in the matter of Valecha Engineering Limited

Adjudication order against Mahadev Corporation Ltd.

R Systems International Limited

Recognised Investors Associations

Adjudication order against JVL Agro Industries Ltd.

Adjudication order against Sangal Papers Ltd.

PR – Order in the matter of M/s GCA Marketing P Limited, its promoters and Directors

Ashok Alco-Chem Limited- Order in the matter of application filed under regulation 11(1) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011

Spenta International Limited

Details of Inter-Scheme Transfer in Corporate Bonds by Mutual Funds-Archive

Settlement Data for Corporate Bonds- Archive

Details of trading in Corporate Bonds – Archive – New

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Miscellaneous

Will Bomb For Food

Streetwise Professor

Russia is leasing 12 SU-24 swing wing Fencer fighter-bomber aircraft to Argentina. Argentina is paying with . . . food, specifically beef and wheat. The 1970s-era SU-24 was, um, very similar to the US’s 1960s-era F-111, which the US retired in 1996. (Seriously: look at pictures of the Soviet SU-24 and the American F-111 and it’s hard to tell the difference.)

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Former New York Gov. Mario Cuomo Has Died at 82

WSJ

His Liberal Speeches Made Him a National Leader of the Democratic Party Through The 1980s

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London financial sector’s revival fuels office rental cost fears

Kate Allen, property correspondent, FT

London’s office market is booming as the capital’s resurgent banking and finance sector encounters a shortage of new space — prompting warnings that rents are set to soar.

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