John Lothian Newsletter: Goldman, Deutsche Bank Say Pound Plunge Is Just Getting Started; CBOE Launches Second Index Series That Targets Investment Outcomes;

Jul 7, 2016

First Read

“Cannot be done”: ISE’s Gary Katz Tells The Inside Story Of The Biggest Disruptor To The Options Industry
Jim Kharouf, JLN

It’s been quite a ride for almost 20 years for Gary Katz, now officially the former co-founder, president and CEO of the International Securities Exchange

Nasdaq closed the deal to buy ISE from Deutsche Boerse on June 30, ending one of the most pioneering and successful runs for an exchange in the history of financial markets. Co-founded in 1997 by Katz, David Krell, William Porter and Marty Averbuch, the group set out to create the first fully electronic US equity options exchange. The exchange launched in 2000, but the road was bumpy, funny and frustrating, even on good days. But in five years, ISE went from being an interesting upstart to an exchange holding more than 30 percent of the US options volume. The truth is, it wasn’t an easy five years, not to mention the years it took to develop and create the exchange.

The first task at hand was to build an all-electronic options trading platform. So the ISE team traveled to Stockholm to partner with Swedish market and technology company OM on the building of a new matching engine.

To read the rest of the story, go to JohnLothianNews.com HERE

Bits & Pieces
By JLN Staff

Did you take our advice and sign up your interns for our Chicago or New York MarketsWiki Education events? Here is the link to sign them up.

We will be publishing a MarketsWiki Education retrospective later today, but here is a teaser:

“There is a lot of competition out there, but that is what our markets are all about. It is the essence of what we do. We innovate because of competition.”

With those words, CME Group Chairman Emeritus Leo Melamed kicked off the inaugural MarketsWiki Education event in 2013. (See Leo’s talk HERE.) We have come a long way since then. The event has expanded its reach each year and in 2016 will visit five cities, beginning next week in Chicago July 12, 14 and 15. For more information on the Chicago event, or to register, click HERE

We have had a couple of changes in the lineup of speakers, Gerry Corcoran of RJO and Julie Holzrichter of CME Group have had to cancel due to conflicts that have arisen. Also, Jenny Knott and Steve Gibson of ICAP now have conflicts. We have added Scott Feldman, managing director at ICAP Infinity as one replacement in New York. Bill Looney, director of global client services of the CBOE is another new speaker. And later today we hope to confirm our last speaker for New York. The full list, as we know it today, can be found HERE

The European version of MarketsWIki Education 2016 is coming this fall. Though it is tempting to lock in some rates now, Goldman Sachs and Deutsche Bank are telling us to wait, as the GB pounding is just getting cranked up (see story in Leads below).

The Brexit decision and world instability is adding to the appeal of gold as a safe haven. A low British pound along with a record-low US Treasury yield led to a record high of 662,840 in open interest in gold futures on CME Group’s Comex yesterday.

In other precious news, CME Group appointed Young-Jin Chang as global head of metals. She was previously director, metals research and product development.

How do you like the new newsletter categories so far? Let us know what you think.

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Avoiding Europe’s Next Banking Crisis
By Editorial Board – Bloomberg
Italy’s slow-motion banking crisis is getting worse, and if it isn’t stopped, it could cause system-wide damage across the euro area and beyond. To contain this danger, the European Union must be willing to bend some rules.
goo.gl/J6fWyJ

***** Bending rules is better than breaking them. Breaking them would be bad.

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MWE 2016

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A Blockchain Solution to Gold Settlement Issues
Sarah Rudolph – JLN

Amid all the talk of blockchain and its applications for the financial and trading worlds, Euroclear and ItBit have gotten together to come up with what they feel is a solution to some of the problems in the gold market, in particular the settlement of unallocated gold.

The two companies are partnering to develop a blockchain-based service which lowers costs, makes delivery and payment systems more efficient, and reduces balance sheet issues. The service uses New York-based ItBit’s blockchain technology called Bankchain, which provides tracking, clearing and settlement of trades.

Addressing efficiency problems in the gold markets is no easy feat. There are basically two types of gold that trade – allocated and unallocated. Unallocated gold sits in a pool and when you buy and sell it, you don’t actually own a specific bar of gold but only a percentage of all the gold in the pool – similar to stocks. So participants are basically buying and selling a credit claim on the bank that holds the gold.

To read the rest of this story, go here

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Larry Summers: Interest rates are at inconceivable levels, and we must confront what that means
By Lawrence H. Summers – Washington Post
The U.S. 10- and 30-year interest rates on Wednesday reached all-time lows of 1.32 percent and 2.10 percent. Record-low 10-year interest rates were also registered in Germany, France, Switzerland and Australia. Notably, Swiss 50-year interest rates are now for the first time negative. Rates out 15 years are negative in Germany and nine years in France.
/goo.gl/55zPf8

****** I am not sure Larry Summers is using “inconceivable” correctly. Or as Inigo Montoya of The Princess Bride said, “You keep using that word. I do not think it means what you think it means.”

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Putin’s Military Buildup in the Baltic Stokes Invasion Fears; Baltic officials say NATO forces are not enough to deter Russia.
Henry Meyer – Bloomberg
Vadim Kuznetsov says his excursion-boat business along Russia’s border with Poland has been torpedoed by a new Cold War.
goo.gl/cpP0bU

***** Summering in the Baltics is always fun.

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Algo Trading

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Wednesday’s Top Three
Now that the Brexit ship has sailed and the sale of ISE to Nasdaq is complete (see Gary Katz story above), Deutsche Boerse is refocusing its attention on the LSE deal, and how to navigate the remaining hurdles. Yesterday’s top-clicked story was Deutsche Börse suggests dual holding company after LSE merger by the FT’s Phil Stafford.
In second place, a bit of career advice from Business Insider, The first thing you should do when you start at a Wall Street bank. In these days of bank layoffs, perhaps the answer is “polish up the resume.” Rounding out the top three was a column written by Neurensic’s Tayloe Draughon, Wash Trading isn’t Victimless

Lead Stories

Trading: What happened when the pit stopped; The Nymex floor brought wealth for many without pedigree but electronic trading has blocked the path
Gregory Meyer – FT
Cindee Rifkin was a 19-year-old babysitter when her employer, a commodities trader, invited her to lower Manhattan’s oil exchange. In the din of the floor a broker gave her a card scrawled with the arcane terms of a futures deal.
/goo.gl/YE9IiU

The Big-Bank Bloodbath: Losses Near Half a Trillion Dollars; At 20 big banks, plunging share prices this year have erased a quarter of their combined market value
By DAVID REILLY – WSJ
Big banks are nearly half a trillion dollars in the hole.
Since the start of 2016, 20 of the world’s bigger banks have lost a quarter of their combined market value. Added up, it equals about $465 billion, according to FactSet data.
goo.gl/TeVRFo

Goldman, Deutsche Bank Say Pound Plunge Is Just Getting Started
Lananh Nguyen, Susanne Barton – Bloomberg
Goldman, Citigroup project $1.20 with BOE poised to cut rates; Deutsche Bank estimates $1.15 as economic confidence fades
The pound’s plunge isn’t over yet, according to three of the world’s top currency traders.
goo.gl/UGpRmu

Deutsche Boerse tells German politicians: Merged stock exchange will have EU HQ
William Turvill – City AM
Deutsche Boerse has informed politicians in Germany that it will have an EU headquarters after a merger with the London Stock Exchange, City A.M. has learned.
goo.gl/3u8rbC

CBOE Launches Second Index Series That Targets Investment Outcomes; CBOE S&P 500 Enhanced Growth Index Series Uses Options to Enhance Returns; Vest Financial to Offer Enhanced Growth Indexes Products
CBOE
Chicago Board Options Exchange© (CBOE©) today announced it has created a series of 13 “Enhanced Growth Indexes,” the second in a family of options-based strategy performance benchmarks designed to target the outcomes of specific investment strategies.
goo.gl/EtSWWn

Treasuries Deliver $700 Billion Windfall to World Safety Seekers
Eliza Ronalds-Hannon – Bloomberg
U.S. 10-year yields fall for fourth day to close at record low; Fed minutes show heightened uncertainty after payrolls slump
The 2016 bond-market rally that drove Treasury yields to record lows this week has generated more than half a trillion dollars in gains for global investors.
goo.gl/pcklB7

***DA: That’s the good news. The bad news is it will be difficult to duplicate from here. In the long term, fixed income returns are about yield, not price fluctuations.

Citadel names Microsoft COO to head securities unit
Crain’s Chicago Business
Citadel LLC hired Kevin Turner, the chief operating officer at Microsoft Corp., to become chief executive officer of its securities unit as financial-services firms seek talent to help build their technology expertise.
goo.gl/KXETqH

GFMA, IIF, ISDA, JFMC and TCH Respond to the Basel Consultation on Leverage Ratio
ISDA
The Global Financial Markets Association (GFMA), the Institute of International Finance (IIF), the International Swaps and Derivatives Association (ISDA), the Japan Financial Markets Council (JFMC) and The Clearing House (TCH) today responded to the Basel Committee on Banking Supervision’s (BCBS) consultation on Revisions to the Basel III leverage ratio framework (Proposed Framework). The full response is available here.
goo.gl/aAd2LI

HQ not an issue in Deutsche Boerse/LSE merger
By Andrea Thomas – MarketWatch
The planned merger of Germany’s Deutsche Boerse AG stock exchange with U.K. rival London Stock Exchange Group PLC is a corporate decision and the new base of the company isn’t the key issue, Finance Minister Wolfgang Schaeuble said Wednesday
goo.gl/63rh2B

Bill Gross: the Market’s Game of ‘Monopoly’ Is Coming to an End
By PAUL VIGNA – WSJ
The game is ending, and some people haven’t even figured out the rules yet. That’s pretty much the conclusion Janus Capital’s Bill Gross draws in his latest investment letter.
goo.gl/oqRKeH

***DA: But don’t just read the WSJ story, read the whole letter. Best line: in today’s modern day economy, central banks are really the “community chest”, not the banker.

Bond liquidity at risk of ‘interminable decline’ – study
By Tim Burke – Financial News
The business models of investors and trading institutions are being “rethought and adapted” in the light of strained corporate bond market liquidity in Europe, according to a new report from a trade body.
goo.gl/8E1q6B

U.S. SEC approves NYSE request for new market volatility rules
BY CHUCK MIKOLAJCZAK – Reuters
The U.S. Securities and Exchange Commission has approved plans by the New York Stock Exchange to speed up and smooth early morning trading in times of market stress.
goo.gl/WR5nGg

BM&FBOVESPA Publishes June Market
Modovisione
Trading value in the equity market (BOVESPA segment) totaled BRL 143.65 billion in June compared with BRL 139.58 billion the previous month. Average daily trading value was BRL 6.52 billion, vis-à-vis BRL 6.64 billion in May. Total volume reached 19,491,168 from 19,650,240 the previous month. Average daily volume was 885,962 (935,726 in May).
goo.gl/0mnCda

Rio Olympics to Be Petri Dish for Study of Zika Virus; The U.S. Olympic Committee is seeking volunteers from its athletes and staff to submit fluid samples and to be tracked.
Deena Shanker – Bloomberg
Talk about taking one for the team. In an upcoming study announced on Tuesday, the U.S. Olympic Committee, in partnership with the National Institutes of Health, is hoping to volunteer its own staffers and U.S. Olympic athletes for a study that will help researchers answer some basic questions about the Zika virus.
goo.gl/UTx4Cs

S&P sounds alarm on hedge fund reinsurers; Questions raised on whether all will survive as they underperform traditional rivals
by: Alistair Gray and Miles Johnson in New York – FT
Recent losses suffered by hedge funds have called into question the business model of the offshore-based reinsurers that provide capital used by them to invest, according to Standard & Poor’s, the rating agency.
/goo.gl/dXXYSL

Central Banks Put Squeeze on Sovereign-Debt Market; A buying spree by central banks is reducing the availability of government debt for other buyers and intensifying the bidding wars that break out when investors get jittery
By MIN ZENG and CHRISTOPHER WHITTALL – WSJ
Christopher Sullivan, a money manager in New York, is worried that when he needs U.S. Treasury bonds one day, he might not be able to get them.
goo.gl/FdfEoZ

After 4,400% Surge, Bitcoin’s Fate Hinges on Huge Chinese Miners
Lulu Yilun Chen, Yuji Nakamura – Bloomberg
China is home to 90% of bitcoin trades and 70% of mining; Key meeting this month as network gets closer to max capacity
Wu Jihan still remembers the exhilaration he felt after learning about bitcoin in 2011.
goo.gl/CuWw9b

Brexit

Four U.S. investment banks vow to help London after Brexit vote
BY DAVID MILLIKEN – Reuters
Four U.S. investment banks promised British finance minister George Osborne on Thursday that they would help London keep its top spot as a global financial center following the country’s voted to leave the European Union.
goo.gl/9AqokE

JPMorgan could move thousands of staff out of UK: report
Reuters
JPMorgan Chase & Co (JPM.N) could be forced to move thousands of staff out of Britain if the country loses its automatic right to sell financial services to the European Union after last month’s Brexit vote, bank CEO Jamie Dimon told an Italian newspaper.
goo.gl/9YIGk6

Statement From The UK Chancellor And International Investment Banks On London As A World Leading financial Centre
Mondovisione
Joint statement from the Chancellor of the Exchequer, George Osborne, and leaders of international investment banks released on 7 July 2016.
goo.gl/gkoVuX

Paris plans to swipe London’s finance jobs post-Brexit
Leigh Thomas and Maya Nikolaeva, Reuters
The French government pledged on Wednesday to make its tax regime for expatriates the most favorable in Europe in a landgrab for London banking business displaced by Britain’s decision to quit the European Union.
goo.gl/eS50zM

Brexit Trauma Stalks EU as Leaders Brace for More Shocks to Come
Alan Crawford, Ian Wishart, Marine Strauss
EU’s 27 leaders minus Cameron to look for reset in September; Schaeuble says ‘this isn’t the time’ for European visions
Throughout the Cold War, Bratislava stood on the front line of the ideological divide between east and west. Now the Slovak capital situated a stone’s throw from the Austrian border is again at the crux of European history.
goo.gl/TymqYf

Brexiled? What Your London Broom Closet Buys in Europe
Is your boss moving you because of Brexit? Here’s the high life that awaits.
Dara Doyle, Peter Flanagan – Bloomberg
Laura van Driem has a message for bankers facing exile from London as the U.K. prepares to exit the European Union: Congratulations! Your life is about to get better.
goo.gl/JR8NCZ

Brexit Casts Doubt on the Wisdom of Crowds
By Mark Buchanan – Bloomberg
During the next couple months, the various candidates to replace U.K. Prime Minister David Cameron will debate what to do now that voters have decided to leave the European Union. They should keep in mind that doing exactly what the voters said might not be the wisest — or even the most democratic — approach.
goo.gl/mwOFYX

Brexit’s Bitter Aftertaste Empties London Restaurant Tables
Sam Chambers, Richard Vines – Bloomberg
With expense accounts reined in, Britain’s dining boom slows; Pound’s fall raises cost of Spanish ham; lock in the Bordeaux?
At Corrigan’s restaurant in London’s affluent Mayfair district, the three private rooms are normally filled with bankers celebrating deals over dishes like roast saddle of rabbit with spinach and morel mushrooms, for 30 pounds ($39).
goo.gl/NlnskN

Hedge funds and buyout groups look at leaving London; Survey after Brexit suggests vote has led some to rethink UK base
by: Madison Marriage – FT
Some London hedge fund and private equity managers are starting to look at shifting operations out of the UK and hiring staff in continental Europe after Britain’s decision to sever its relationship with the EU.
/goo.gl/PtX3KI

Exchanges, OTC and Clearing

U.S. Treasuries trading volume rises in June – ICAP
Reuters
Average daily volumes for U.S. Treasuries on ICAP Plc’s electronic trading platform rose in June from May, fueled by a weak May U.S. jobs report and worries about Britain’s referendum on its membership in the European Union.
goo.gl/Jzg08R

TSX Venture Exchange To Launch New Market Making Service Called TSXV LiquidityPro™ – Exchange Advances Initiative To Revitalize Canada’s Public Venture Market With New Program To Enhance Liquidity
Mondovisione
TSX Venture Exchange (TSXV) today announced the launch of a new issuer-sponsored market making service designed to enhance liquidity for public venture companies. In the optional TSXV LiquidityPro program, TSXV companies can select from a pool of pre-qualified TSXV LiquidityPro Providers (LPPs) that can provide quotation services, facilitate price discovery and increase overall liquidity for issuers under the oversight and governance of TSXV.
goo.gl/tZAKSt

Change in the Holding of an Executive Office Approved
HKEx
Reference is made to the announcement of Hong Kong Exchanges and Clearing
Limited (“HKEX”) dated 15 June 2016 in relation to the appointment of Mr Lee Kwok
Keung, Roger as the Chief Executive of The Stock Exchange of Hong Kong Limited
and Hong Kong Futures Exchange Limited (“Announcement”).
goo.gl/H77ATh

Nasdaq is Global Leader for New Listings in First Half of 2016
By GlobeNewswire
Welcomes record total of U.S. listing exchange transfers; Extends track record as leading U.S. exchange for total IPOs to 10 consecutive quarters
Nasdaq (Nasdaq:NDAQ) announced today that it welcomed a combined 176 new listings – including 68 initial public offerings (IPOs) – in the first half of 2016 to its U.S. and Nordic exchanges, maintaining its position as the leading global exchange venue. This includes DONG Energy – the largest IPO of 2016 YTD across global exchanges – and a record number of 13 company listing transfers from NYSE. Despite a global market under pressure from a combination of economic and political uncertainty, companies from a diverse range of industries and geographies successfully launched their IPOs on Nasdaq’s U.S. and Nordic exchanges, raising $3.8 billion and EUR4.2 billion, respectively.
goo.gl/X9KddK

INTERCONTINENTAL EXCHANGE REPORTS ICE & NYSE JUNE 2016 STATISTICS
ICE
Daily futures volume up 9%, cash equities up 19% y/y; Double-digit volume growth in ags, other oil, interest rates and equity indices; 2Q16 daily futures volume up 8%, cash equities up 17% y/y
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today reported June 2016 trading volume and related revenue statistics, which can be viewed on the company’s investor relations website at http://ir.theice.com/ir-resources/supplemental-information in the Monthly Statistics Tracking spreadsheet.
goo.gl/vqv9So

Enertime lists on Alternext to accelerate commercial deployment; EUR4m raised; market capitalisation EUR15m
Euronext
EnterNext, the Euronext subsidiary dedicated to promoting and growing the market for small and medium-sized companies (SMEs), today welcomed Enertime, an innovative company specialising in energy efficiency for industry, for its first day of trading on Alternext Paris.
/goo.gl/qtxdFT

Webinar on demand. EMIR OTC Clearing: What’s next?
Eurex
Hosted by DerivSource, a panel of industry experts from both the buy side and the sell side reviews the lessons learned from CAT 1 firms that are now live with EMIR OTC clearing and discusses the challenges ahead for CAT 2 and CAT 3 firms.
goo.gl/UYl0KX

Big Oil Finding Money for Biggest Projects; $36.8 billion project agreed by Chevron, Exxon Mobil and their partners suggests oil’s deep freeze might be thawing
By SELINA WILLIAMS in London and BRADLEY OLSON in Houston – WSJ
There are signs the deep freeze in oil-industry spending is beginning to thaw.
goo.gl/4q9Nv0

Politics

GOP chair threatens Dem AGs in Exxon climate probe
By JOHN SICILIANO – Wasthington Examiner
The Republican chairman of the House science committee is threatening to subpoena a group of Democratic state attorneys general for all information related to their climate change investigations into Exxon Mobil.
goo.gl/PzhVKe

Gingrich, Kaine seen by betting markets as likely vice-presidential picks
By Steve Goldstein – MarketWatch
Former House Speaker Newt Gingrich and Virginia Sen. Tim Kaine are seen by betting markets as the likely vice-presidential nominees for Donald Trump and Hillary Clinton, respectively.
goo.gl/C9slb1

More than 30 Scientific Societies Urge Congress to Stop Denying Climate Change
BY DIANNA WRAY – Houston Press
For a while now, scientists have been dealing with a steady stream of climate change denial from the U.S. Congress with a mix of wit and thinly veiled exasperation, but it looks like they’ve finally run out of patience because some of the top scientific organizations in the country just got together and sent Congress a strongly worded letter.
goo.gl/2aUJgq

Andrea Leadsom revises ‘exaggerated’ CV; Conservative leadership candidate faces claims she embellished City career
by: Martin Arnold and Caroline Binham – FT
Andrea Leadsom has published a revised CV after claims that she exaggerated her roles in a City of London career that supporters describe as “stellar”.
/goo.gl/1lXMwH

Investing and Trading

Rising Open Interest, Prices Suggest Funds Returning To Gold Futures
Kitco News – The rise in gold prices during the first four days of the week has coincided with an increase in open interest for Comex futures, suggesting fund managers and other speculators are returning to the market as buyers, analysts said.
This means the rally has more substance than if it were simply the result of short covering, in which traders buy to offset or exit bearish positions, said George Gero, precious-metals strategist with RBC Capital Markets Global Futures.
goo.gl/SPK3UN

Man GLG to shut American Growth fund; Follows failed merger
Daniel Flynn – InvestmentWeek
Man GLG will close its £24m American Growth fund later this month, Investment Week can reveal.
goo.gl/kLwu6x

First Euro STOXX 50 ETF To Be Listed In Australia
Mondovisione
STOXX Ltd., the operator of Deutsche Boerse Group’s index business, and a global provider of innovative and tradable index concepts, today announced that the EURO STOXX 50 Index has been licensed to ANZ ETFS Management (ANZ ETFS) to serve as the underlying for an exchange-traded fund (ETF) in Australia that will be available later this month. ANZ ETFS is a partnership between Australia and New Zealand Banking Group Limited (ANZ) and ETF Securities, providing ETF product solutions to Australian investors.
goo.gl/yFxh02

IEA warns of ever-growing reliance on Middle Eastern oil supplies; Agency says rise in demand amid price slump has given region biggest market share since 1970s
by: Anjli Raval and David Sheppard in London – FT
The world risks becoming ever more reliant on Middle Eastern oil as lower prices derail efforts by governments to curb demand, the west’s leading energy body has warned.
/goo.gl/vWYnP5

Gross Calls Sovereign Bonds Too Risky With U.S. Yields Near Lows
Wes Goodman
Yield on World Sovereign Bond Index falls to less than 1%; Demand for debt is waning following plunge in yield, CIBC says
Bill Gross said sovereign bond yields at record lows aren’t worth the risk.
goo.gl/XfW0lf

U.K. Property Fund Suspensions Send a Warning to the Junk Bond World; Junk bond funds may pose a greater liquidity risk than those invested in U.K. commercial real estate.
Alastair Marsh – Bloomberg
Investors in U.K. commercial real estate just touched a nerve.
goo.gl/DxoIyy

The 30-Year U.S. Treasury Hit a Milestone It Hasn’t Seen Since the Financial Crisis; Another way of looking at the limitless thirst for government bonds.
Joe Weisenthal – Bloomberg
It’s well known that investors are piling into sovereign bonds all around the world, sending yields to levels that have never been seen before. Just today we see that the Japanese 20-year and the Danish 10-year have seen their yields go negative.
goo.gl/Vom5hh

Institutions

Aperture Group Hires Sarah Butterfass as Chief Marketing Officer
OptionsHouse
Aperture Group, LLC, the owner of OptionsHouse, announced today that Sarah Butterfass has been named Chief Marketing Officer. Ms. Butterfass joins Aperture Group from Orbitz Worldwide, Inc., where she most recently served as Vice President, Customer Loyalty. As CMO, Ms. Butterfass is responsible for expanding and leading marketing efforts at Aperture Group, and its subsidiaries, OptionsHouse and optionMONSTER Media.
/goo.gl/stul4p

Ex-Lehman trader loses bid for $83 million ‘windfall’ bonus : judge
BY JONATHAN STEMPEL – Reuters
A federal judge on Wednesday said a former star Lehman Brothers Holdings Inc trader was not entitled to an $83 million bonus he claimed he was owed following the investment bank’s 2008 collapse, on top of a similar sum that Barclays Plc already paid him.
goo.gl/3Q6ROg

Optimism’s the Word as Bankers Look for Deals After Brexit Shock
Manuel Baigorri, Ed Hammond – Bloomberg
Dealmakers facing global turmoil in financial and currency markets since U.K. voters decided to leave the European Union are finding reasons to be positive.
goo.gl/CRmFht

Wall Street hot shot ‘trashes’ $20M Hamptons home
By Emily Smith – NY Post
Hedge funder Brett Barna threw a wild “Wolf of Wall Street”-style Hamptons party — awash with Champagne, scores of bikini-clad women and costumed gun-toting midgets — and allegedly trashed a $20 million mansion. Barna, a portfolio manager at Louis Bacon’s Moore Capital Management, hosted the all-day “#Sprayathon” pool party on Sunday, where 1,000 people doused themselves in bubbly as rapper Ace Hood performed.
goo.gl/DPbb53

Goldman Stock Picker’s Case Gets Run Over as Correlations Jump
Oliver Renick – Bloomberg
Low-dispersion environment returns after Brexit volatility; Citi index shows highest stock-to-stock correlation since ’11
It was less than a month ago that Goldman Sachs Group Inc. saw the U.S. equity market turning into a stock-picker’s playground. Then came Brexit.
goo.gl/spGuF3

Fintech

North Carolina Leaps Forward With Blockchain-Friendly Bill – State, Chamber Of Digital Commerce Make History With Comprehensive Money Transmitter Act
Mondovisione
Governor Pat McCrory has signed House Bill 289 into law, marking a historical moment for States’ regulation of blockchain technology and virtual currencies. The ratification of the bill, also known as the North Carolina Money Transmitter Act, comes after 16 months of deliberations between the North Carolina Commissioner of Banks, the General Assembly and the Chamber of Digital Commerce.
goo.gl/el1TOi

FinTech the focus of the latest edition of “AHEAD”
SIX
The current edition of the “AHEAD” newsletter from SIX Swiss Exchange takes a look at examples of FinTech and at the biotech industry.
goo.gl/PyPIyr

Blockchain: the answer to life, the universe and everything?; Bitcoin hasn’t lived up to the salvation rhetoric, but the digital engine behind the currency may be about to change the world
Alex Hern – The Guardian
Have you heard the good news? The blockchain is here – and it’s going to save everything. If you aren’t tied to the tech community, you might not have picked up on this salvation rhetoric. But you probably have heard of bitcoin, which burst into the public consciousness before imploding dramatically in 2014.
/goo.gl/5W5y2t

Regulation

?US in bottom third for clearinghouse rule adoptions due largely to SEC, report shows
Neil Roland, MLex
The US Securities and Exchange Commission’s sluggishness in adopting standards for derivatives clearinghouses and other financial-market plumbing has placed the United States in the bottom third of global implementation rankings. A report last week by international authorities shows that the US ranks below 19 of 28 countries surveyed about their adoption and implementation of 2012 global financial-stability principles for market infrastructures.
goo.gl/2mkmlx

Wall Street Scion Caspersen Pleads Guilty to $38 Million Fraud
By REUTERS in NY Times
Former Wall Street executive Andrew Caspersen pleaded guilty on Wednesday to charges that he defrauded investors out of over $38 million, blaming his conduct on a gambling addiction he could not control.
goo.gl/C6QZtA

Britain Seeks Retrial of Barclays Traders in Libor Case
By CHAD BRAY – NY Times
British authorities said on Wednesday that they would seek a retrial of two former Barclays traders after a jury was unable to reach a verdict this week on charges that they plotted to manipulate a benchmark interest rate known as Libor.
goo.gl/uokHkI

Why One Regulator’s Face Is on ‘Wanted’ Posters in Suburban D.C.
Jonathan Crawford – Bloomberg
Once sleepy watchdog under fire over pipeline approvals; Commissioner says protest outside home crossed the line
Tony Clark was wrapping up dinner with his family when the doorbell rang.
goo.gl/m3IgND

New EU Market Abuse Rules Pose Challenges for U.S. Issuers
By MARA LEMOS STEIN – WSJ
With the new Europe-wide market abuse regulation now in place, the once lean rule book of some exchanges housing securities of U.S. issuers has grown heavy, calling for further diligence and compliance from those willing to tap Euro-denominated capital markets.
goo.gl/Ei2srz

Banker pleads guilty to masterminding $150M fraud
By Kaja Whitehouse – NY Post
He threw away a picture-perfect life to feed his gambling addiction. Harvard-?educated Upper East Sider Andrew Caspersen pleaded guilty Wednesday to masterminding a $150 million fraud that duped his family, friends and a ?billionaire out of $38.5 million.
goo.gl/QzPJK2

Andrew Caspersen Pleads Guilty In Manhattan Federal Court To Defrauding Investors Of Over $38 Million And Misappropriating Over $8 Million From His Former Employer
US DOJ
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that ANDREW CASPERSEN pled guilty to defrauding investors of over $38 million and misappropriating over $8 million from his former employer. CASPERSEN pled guilty to one count of securities fraud and one count of wire fraud before U.S. District Judge Jed S. Rakoff.
/goo.gl/xm2Yh6

ESMA ISSUES OPINIONS ON SWEDISH PENSION SCHEME TO BE EXEMPT FROM CENTRAL CLEARING UNDER EMIR
ESMA
The European Securities and Markets Authority (ESMA) has today issued an opinion regarding the exemption of a Swedish pension scheme from the obligation to centrally clear OTC derivative contracts under the European Market Infrastructure Regulation (EMIR).
/goo.gl/iIqrmt

ESMA ISSUES POSITIVE OPINION ON SHORT SELLING BAN BY ITALIAN CONSOB
ESMA
The European Securities and Markets Authority (ESMA) has issued an official opinion agreeing to an emergency short selling prohibition, for a period of 90 calendar days, by the Commissione Nazionale per le Società e la Borsa (CONSOB) on net short positions in Banca Monte dei Pascha di Siena spa (BMPS) shares under the Short Selling Regulation.
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Regions

EMTA and CME Group adopt Moscow Exchange USD/RUB FX benchmark
Moe
Moscow Exchange’s (MOEX) USD/RUB benchmark has been recommended by the Emerging Markets Traders Association (EMTA) as the major settlement (reference) rate for OTC rouble derivatives (NDFs, NDOs) for its OTC FX members. CME Group will also use MOEX”s USD/RUB benchmark for its rouble-denominated currency futures.
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Sebi wants better algo trading, more accountable bond rating; Regulator looking at level playing field in algorithmic trades, new norms for rating agencies, says Rajeev Kumar Agarwal
Live Mint
Rajeev Kumar Agarwal, whole-time member, Securities and Exchange Board of India (Sebi) says the regulator will increase accountability for credit rating agencies which are rating bonds. Sebi is also set to slow down algorithmic trading to ensure a level playing field, said Agarwal, who handles market regulation, intermediaries and surveillance at the regulator. Edited excerpts from an interview:
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Indians students prefer to work for RBI rather than American tech giants Amazon or Facebook
Madhura Karnik -Quartz India
Others may hanker for a job at Amazon and Facebook—known to be glamorous workplaces—but for Indian students, good old Reserve Bank of India (RBI) takes the cake.
goo.gl/2LrLn1

It’s not just Indian bond yields that have fallen
Live Mint
Bond yields around the world plunged after Brexit, which is a bit of a surprise since the event was supposed to trigger a flight to safe-haven assets such as US treasuries and gold
goo.gl/uhTTyV

NASA Data Shows Toxic Air Threat Choking Indian Subcontinent
Anindya Upadhyay – Bloomberg
Geography, climate worsen haze across the Indo-Gangetic plain; Cities such as New Delhi being left to battle to clean air
The mega-city of New Delhi has tried everything from banning diesel guzzling SUVs to taking about half the city’s cars off the streets in a fight against air pollution. Officials may yet have to do much, much more, based on National Aeronautics and Space Administration satellite research.
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Nomura Says Kuroda’s Fading Influence Seen in Yen Link to Gold
Kevin Buckland, Hiroko Komiya – Bloomberg
Correlation at highest since 1978 amid rush for haven assets; Investors ‘extremely skeptical’ about BOJ policy, Ikeda says
Nomura Holdings Inc. says investors have lost faith in the Bank of Japan’s ability to weaken the yen.
goo.gl/QaZDqH

EBS BrokerTec and ICAP Information Services launch the EBS CNH Benchmark; EBS CNH Benchmark is the first fully electronic, trade-backed reference rate for the CNH market
ICAP
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 ‘EBS CNH Benchmark’, the first fully electronic, trade-backed reference rate for the offshore Chinese renminbi (CNH) market. The benchmark has been launched following considerable interest from a number of major Chinese banks and senior onshore authorities
goo.gl/Ww2LYK

Miscellaneous

Euromoney Awards for Excellence 2016 Central and Eastern Europe winners revealed
Euromoney
Akbank wins best bank in central and eastern Europe; Citi retains best investment bank in the region; UniCredit is best financing house for 2016.
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Past JLN Newsletters

CME to permanently close most trading pits

CME to permanently close most trading pits

First Read $40,626/$300,000 (13.5%) Anonymous ++++ Hits & Takes John Lothian & JLN Staff Without fanfare or amplification from its executives, the CME Group shut the books on most -- but not all -- of its floor trading history Tuesday afternoon with the...

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