First Read

Bats Says Exchange Fee Cuts Would Save $850 Million for Traders
By Sam Mamudi – Bloomberg
Another leading stock exchange operator has a plan to improve the $24 trillion U.S. equity market. Bats Global Markets Inc. suggested a reduction in fees for buying and selling some stocks that could produce industry savings exceeding $850 million for the most-active shares, according to a statement today. The Lenexa, Kansas-based company also said there should be a review of how brokers report where they send stock orders and what standards they use in making those decisions.
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***** The discussion is making progress.

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BATS Issues Open Market Structure Letter to Industry
BATS
Dear BATS Global Markets customers and members of the trading community,
We’ve recently spoken with many of you and share your strong desire for forward-looking market structure initiatives that will maintain the healthy market quality gains investors have realized in the past decade, while achieving further optimizations to our equity market in the years to come.
Based on these conversations and our experience as a global stock exchange company, we believe the time is now to address the current one-size-fits-all aspect of the U.S. market, which does not fully meet the needs of its many participants, including end investors and issuers.
In an open letter to the industry and a petition for rule-making to the SEC you can find here, we explain our thinking on today’s market structure, including a plan for reducing trading access fees by more than 80% as part of a tiered access fee proposal.
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**JK – Tiered fees are so, uneven.

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Cold truth: It’s not winter that’s driving people out of Illinois
Phil Rosenthal, Chicago Tribune
Yes, it’s cold. But that’s not why people leave Illinois.
Illinois tolerates winters, not whiners. But the cold truth is there are real problems.
Leave. Just leave. Join the Illinois exodus. No one cares that you’re freezing and miserable. Shut up and shiver. If you can’t stand the cold, get out of the arctic air mass.You need to buy some mittens and mukluks, or you need to pack up and go. Either way, no one wants to hear about it. Winters, we’ll tolerate here. Whiners, we won’t. Truth is, we’re sweating bigger problems in this state. What’s cooled the affection of the people and businesses here and elsewhere toward this area is the glacial speed with which leaders in Springfield and Chicago have moved to address financial problems and other urgent matters dragging everyone down.
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**JK – I could use a hot coffee from Don Wilson’s Starbucks…

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Don Wilson sells Gold Coast Starbucks for $14 million
By Micah Maidenberg, Crain’s Chicago Business
Trader and real estate investor Don Wilson’s appetite for commercial property in Chicago over the past few years has been ravenous. But apparently, he has had his fill of lattes at Starbucks.
A venture of DRW Holdings, the Chicago company Wilson leads as CEO, last month sold the two-story, 4,418-square-foot building at 1003 N. Rush St. in the Gold Coast to an affiliate of investment manager Invesco for $14.1 million, or more than $3,191 per square foot, according to Cook County property records.
The DRW venture acquired the building, where the Seattle coffee chain operates a two-level cafe, for $12.4 million more than two years ago.
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**JK – Forget that coffee, I could use a Starbucks.

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LME boosts outreach strategy with new education offering
LME
The London Metal Exchange (LME) today announces a new education offering for market participants as it focuses on greater market engagement to expand the business globally.
“The LME’s training programme is instrumental in driving forward the Exchange’s market engagement and outreach strategy,” said Paul MacGregor, LME Head of Sales. “Enabling a greater understanding of the LME and how it operates will help us to grow business in new markets.”
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***** I love the smell of competition in the morning.

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Seven Financial Technology Startups Selected for the FinTech Innovation Lab London
MarketWatch
The seven startups were chosen from a wide range of applicants and will be mentored for 12 weeks by leading executives from financial services, venture capital and angel investment firms through a series of panel discussions, workshops, leadership coaching and networking opportunities. At the end of the program, the entrepreneurs will be given an opportunity to present their concepts to potential investors and participating industry executives at an Investor Day, hosted at Royal Bank of Scotland’s offices on March 26, 2015.
The companies taking part in this year’s program are: Atsora, Cytora, Duco, PontusVision, Ripjar, Torusware and xWare42.
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***DA: Rare is the day that the back office is front page news, but our friends at Duco seem to be make quite a bit of noise in that space.

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The Quants on the Left Bank: How Paris-Based Physicists Used Algorithms to Get Big Returns
By Jeremy Kahn and Lindsay Fortadom, Bloomberg
Paris is famous as the home of philosophers, scientists and mathematicians. Today, thousands of students traipse through the city’s Left Bank on their way to classes at the Universite Pierre et Marie Curie and the Ecole Normale Superieure.
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***** I told you Paris is happening.

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Mercedes-Benz says will move U.S. headquarters to Atlanta
Reuters
Mercedes-Benz will move its U.S. headquarters to Atlanta from northern New Jersey, affecting about 1,000 employees, the company said on Tuesday.
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***** Is Atlanta the new New York?

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The Role and Impact of Monetary Policy in an Uncertain Economy – TONIGHT 5-6:30 PM
Becker Friedman Institute
How has monetary policy helped in nurturing a sluggish recovery? What expectations should the public have for the role of monetary policy in the future? How do Federal Reserve decision-makers confront or cope with uncertainty when designing and implementing monetary policy? These questions will be explored in a discussion between President Charles Evans of the Federal Reserve Bank of Chicago and Lars Peter Hansen, 2013 Nobel laureate from the University of Chicago.
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***DA: This free event, part of the “Cocktails and Conversations” series, will be held at the Chicago Fed. Space is limited so register ASAP if you wish to attend.

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It’s Never Too Late to Learn New Skills; Adults Can Master Skiing, Golfing or Even Coding With Tailored Techniques, If They Can Stop Overthinking
By Elizabeth Holmes, Wall Street Journal
Have you ever wished you could remember all those years of high school Spanish? Looked longingly at fearless children hitting the ski slopes? Admired a classroom of teenagers writing code?
jlne.ws/1AEFXdr

***** I have a theory. When you stop learning, you start dying. It is as simple as that.

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MarketsWiki

MarketsWiki Page of the Day
JPMorgan Chase & Co.

MarketsWiki Recent Updates

People

Bernard Dan; Lori Sampson; John H. (Bud) Frazier

Companies, Organizations and Groups

ICE Futures Europe; Chicago Stock Exchange; ISE Gemini; Optiver; London Stock Exchange Group plc; Chicago Board Options Exchange

Statistics

56,905,084 pages viewed, 8,126 articles, 188,061 edits
MarketsWiki Statistics

Lead Stories

Group of Financial Institutions Settles MF Global Suit; Goldman, J.P. Morgan, Citigroup Among Firms in Settlement
By Joseph Checkler, Wall Street Journal
A group of well-known financial institutions settled a lawsuit brought by former MF Global Holdings Ltd. investors for $74 million.
jlne.ws/1wpDPRo

Finra to investigate US bond trading
Tracy Alloway – FT
A top regulator for the US brokerage industry said it would begin examining the bond market, including the operations of electronic debt trading platforms that were proliferating as investors seek new ways of trading fixed-income securities.
jlne.ws/1Dk98ET

ICE to launch euro cocoa contract
Emiko Terazono, FT
Intercontinental Exchange has announced the launch of a new euro-denominated cocoa contract ahead of rival CME Group’s entry into the market.
jlne.ws/1xEjWdL

GFI Plans Shareholder Vote on CME Deal
By Zeke Faux, Bloomberg
GFI Group Inc. (GFIG:US) will hold a shareholder meeting in three weeks to vote on whether to sell the company to CME Group Inc. amid a competing proposal from BGC Partners Inc. (BGCP:US)
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BGC Extends All-Cash Tender Offer To Acquire GFI Group For $5.45 Per Share
BGC
Demands that GFI Board Take Immediate Action to Protect the Interests of All GFI Shareholders and Exclude GFI Management from Further Deliberations on the Tender
Intends to Solicit Proxies AGAINST the GFI Management/CME Transaction
Urges GFI Shareholders to Tender Their Shares to BGC
Reaffirms Commitment to Honor Previously Existing GFI Compensation Arrangements
BGC Partners, Inc. (BGCP) (“BGC Partners,” “the Company,” or “BGC”), a leading global brokerage company primarily servicing the financial and real estate markets, today announced that it has extended the deadline for its fully financed, all-cash tender offer to acquire all of the outstanding shares of GFI Group Inc. (GFIG) (“GFI Group” or “GFI”) for $5.45 per share to January 27, 2015.
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LSE-Owned Market Boosts Efforts to Resurrect Corporate Bonds
By John Detrixhe, Bloomberg
As technology startups seek to solve shortcomings in corporate bond trading, a debt market majority owned by London Stock Exchange Group Plc (LSE) is taking steps to match them. LSE’s bond platform, MTS Group, is adding technology developed by B2SCAN that helps European investors find banks willing to trade the corporate debt they want to buy or sell, according to a statement released today. If a match is found, the transactions would be executed on the MTS Group system.
jlne.ws/14ndEU2

Finra to Probe Broker Conflicts When Exchanges Offer Rebates
By Dave Michaels, Bloomberg
The brokerage industry’s self-regulator will spend 2015 looking into whether deals between brokers and exchanges are taking money out of investors’ pockets, regulators said in a letter outlining the year’s oversight priorities.
jlne.ws/1w0WhP8

ICE Futures Europe to Introduce a Euro-Denominated Cocoa Contract
ICE
Intercontinental Exchange, the leading global network of exchanges and clearing houses, today announced that ICE Futures Europe will introduce a new euro currency cocoa contract, which will operate in parallel with the existing London cocoa contract, which is denominated in pound sterling. The euro-denominated cocoa futures and options contracts are expected to be launched in April 2015, with a first maturity of December 2015, subject to completion of relevant regulatory processes.
jlne.ws/1AArOhm

Chocolate Shortage Spurs Revival of Cocoa in Amazon
By Matt Craze, Bloomberg
With chocolate prices surging, a former Credit Suisse Group AG (CSGN) banker wants to help revive cocoa farming in the Amazon basin, where the beans are thought to have evolved about 15,000 years ago.
jlne.ws/1xRcPgG

KRX to make sweeping derivatives reforms
Philip Stafford, FT
The Korea Exchange is to launch a new venue for trading equity, interest rate and renminbi currency futures as part of sweeping reforms to its main securities and derivatives markets.
jlne.ws/14ngdFL

How Even Dairy Farmers Get Squeezed by Rigging in the $5.3 Trillion Currency Market
By Gavin Finch and Julia Verlaine, Bloomberg
Ed Gribble gets up at 5 every morning regardless of the weather to feed the 180 cows on his farm in Sussex, a rural idyll on the south coast of England, adjacent to where economist John Maynard Keynes once lived.
jlne.ws/14ndUT1

SEC probes private-equity firms over alleged bribes
By Josh Kosman, NY Post
US regulators have widened their probe of private-equity firms to include alleged bribes paid to foreign government officials, The Post has learned.
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Russia faces ‘perfect storm’ as reserves vanish and derivatives flash default warnings
By Ambrose Evans-Pritchard, International Business Editor, The Telegraph
BNP Paribas says Russia no longer has enough reserves to cover external debt and enters this crisis ‘twice as levered’ as it was before the Lehman crash
Russia’s foreign reserves have dropped to the lowest level since the Lehman crisis and are vanishing at an unsustainable rate as the country struggles to defends the rouble against capital flight.
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New law means taxpayers must back banks’ ‘incredibly risky’ derivatives deals, Rep. Mark Pocan says
By Tom Kertscher, PolitiFact Wisconsin
Most of us don’t deal in investments known as derivatives, but most of us use banks.
jlne.ws/1zTAjA2

Southeast Asia derivatives trading hit record high
Jeremy Grant in Singapore, FT
Derivatives volumes on the three biggest exchanges in Southeast Asia hit record highs in 2014 in a sign that the region’s capital markets are diversifying beyond equity capital raising and trading into offering risk management and hedging.
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Derivatives markets brace for Basel III margin crunch in 2015
by Elliott Holley, Banking Technology
Derivatives market participants are concerned about the impact of new margin requirements for non-cleared derivatives under Basel III, with a large number unsure whether they will even have to comply with the rules, according to new survey by the International Swaps and Derivatives Association.
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BoE governing body kept in dark during crisis
Chris Giles, Economics Editor, FT
Lord King, the former governor of the Bank of England, kept the governing body of the central bank in the dark on serious internal dissent, denied non-executive directors information about financial stability and fell out with them over alleged leaks, minutes from the financial crisis reveal.
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Regulatory

Revealed: Bank of England files finally shed light on financial crisis meetings; Minutes from 2007 to 2009 reveal political infighting and loss of confidence in the system as banking sector teetered on brink of collapse
By James Titcomb, Mehreen Khan, and Alan Tovey, The Telegraph
The UK financial system’s struggle to deal with the crisis has been laid bare by Bank of England documents detailing a power vacuum between the government and regulators.
jlne.ws/1Ar2SKq

Barack Obama nominates former community banker to Fed board
Gina Chon and Alice Ross in Washington, FT
The White House announced on Tuesday that it would nominate former Bank of Hawaii chief Allan Landon to the board of the Federal Reserve. The move followed complaints that the agency needs representation from community banks amid Wall Street dominance.
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Finra hawks fiduciary in its regulatory priorities for 2015; Agency says acting in clients’ best interests can alleviate compliance problems
By Mark Schoeff Jr., Investment News
Finra released its regulatory and exam priorities for the new year Tuesday, saying most compliance problems can be alleviated if brokerage firms act in the best interests of their clients — an unusual move for an industry that must only ensure investments are suitable for clients.
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Finra Priorities, Execution Noble Fined, Lloyds-PRA: Compliance
By Carla Main, Bloomberg
Some brokers might not be getting the best prices for clients when they send stock orders to exchanges that offer rebates, regulators said in an outline of annual oversight priorities.
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UK banks urge regulator to speed up ringfencing rules
Reuters
Britain’s banks have asked the financial regulator to speed up finalizing new rules to protect their retail customers from riskier parts of their operations to enable them to meet a 2019 deadline.
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Investment Company Act Notices and Orders
Morgan Stanley Smith Barney LLC and Morgan Stanley Global Investment Solutions (Release No. IC-31404; File No. 812-14381; January 5, 2015)
jlne.ws/1eCTnOv

Self-Regulatory Organization (SRO) Rulemaking and National Market System (NMS) Plans
EDGA: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Adopt Top and Last Sale Data Feeds (Release No. 34-73990; File No. SR-EDGA-2014-35; January 5, 2015); see also Exhibit 5
EDGX: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Adopt Top and Last Sale Data Feeds (Release No. 34-73989; File No. SR-EDGX-2014-36; January 5, 2015); see also Exhibit 5
NYSE: Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Its Price List to Eliminate Transaction Fees for Midpoint Passive Liquidity Orders that Remove Liquidity from the Exchange and that Are Designated with a “Retail” Modifier as Defined in Rule 13 (Release No. 34-73997; File No. SR-NYSE-2014-70); see also Exhibit 5
NYSE: Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Its Price List Related to Fees for Trading Licenses to Extend the Current Fee Schedule to February 27, 2015 and to Implement New Trading License Fees Effective March 1, 2015 (Release No. 34-73996; File No. SR-NYSE-2014-74); see also Exhibit 5
NYSE: Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the Fees for NYSE Order Imbalances (Release No. 34-73994; File No. SR-NYSE-2014-77); see also Exhibit 5
NYSE Arca: Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the Fees for NYSE Arca BBO and NYSE Arca Trades (Release No. 34-73998; File No. SR-NYSEArca-2014-148); see also Exhibit 5
NYSE Arca: Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Amend the Fees for NYSE Arca Integrated Feed to Establish Eligibility Requirements for Redistribution (Release No. 34-73993; File No. SR-NYSEArca-2014-147); see also Exhibit 5
NYSE Arca: Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Its Schedule of Fees and Charges for Exchange Services to Eliminate Transaction Fees for Midpoint Passive Liquidity Orders that Remove Liquidity from the Exchange and that Are Designated as “Retail” but which Are Not Executed in the Retail Liquidity Program (Release No. 34-73992; File No. SR-NYSEArca-2014-142); see also Exhibit 5
NYSEMKT: Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the Fees for NYSE MKT Order Imbalances (Release No. 34-73995; File No. SR-NYSEMKT-2014-114); see also Exhibit 5
NYSEMKT: Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Its Price List to Eliminate Transaction Fees for Midpoint Passive Liquidity Orders that Remove Liquidity from the Exchange and that Are Designated with a “Retail” Modifier as Defined in Rule 13 – Equities (Release No. 34-73991; File No. SR-NYSEMKT-2014-108); see also Exhibit 5
NYSEMKT: Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the Fees for NYSE MKT OpenBook MKT Order Imbalances (Release No. 34-73987; File No. SR-NYSEMKT-2014-115; January 5, 2015); see also Exhibit 5
Phlx: Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Modify the Rule Governing Modification of Orders on its NASDAQ OMX PSX Facility (“PSX”) in the Event of an Issuer Corporate Action Related to a Dividend, Payment or Distribution (Release No. 34-74003; File No. SR-Phlx-2014-79); see also Exhibit 5
Phlx: Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Port Fees (Release No. 34-74000; File No. SR-Phlx-2014-83); see also Exhibit 5
Phlx: Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding the Extranet Access Fee (Release No. 34-73988; File No. SR-Phlx-2014-81; January 5, 2015); see also Exhibit 5
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FINRA Releases 2015 Regulatory and Exam Priorities Letter; Five Challenges Firms Should Address Highlighted in 10th Anniversary of Letter
FINRA
The Financial Industry Regulatory Authority (FINRA) today released its 2015 Regulatory and Examination Priorities letter highlighting significant risks and issues that, if not properly addressed, could adversely affect investors and market integrity. This year’s letter, the tenth edition of providing such guidance to firms, focuses on key sales practice, financial and operational, and market integrity matters, and identifies challenges in five key areas that should be addressed to get ahead of the concerns raised in the letter.
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CFTC Staff Issues No-Action Relief to a Swap Dealer from Certain Chief Compliance Officer Reporting Line Requirements under Commission Regulations
CFTC
The U.S. Commodity Futures Trading Commission’s (Commission) Division of Swap Dealer and Intermediary Oversight (DSIO) provided conditional no-action relief to a provisionally registered swap dealer, permitting the firm, subject to the conditions in the letter, to:
jlne.ws/1w0WdPx

ASIC imposes conditions on Guardian Advice licence
ASIC
ASIC has imposed conditions on the Australian financial services (AFS) licence of Suncorp-owned Guardian Advice following a surveillance which uncovered deficiencies in the advice it provided to retail clients.
jlne.ws/140GWYe

The Clock For Market Structure Change Is Ticking
By Ivy Schmerken, WallStreet & Technology
Capital Markets Outlook 2015: The SEC is conducting a broad review of US equity market structure, but the most important proposals are the tick-size pilot, maker-taker rebates, dark pools, and order routing transparency.
jlne.ws/1Klx2lj

BitMEX launches bitcoin volatility futures contract
FOW
The Bitcoin Mercantile Exchange (BitMEX), the bitcoin derivatives exchange, has launched the Bitcoin 30 Day Historical Volatility Futures Contract. The new futures contracts expire on the last Friday of every calendar month at 12:00 GMT.
jlne.ws/1DksbyN

Exchanges & Trading Facilities

Nasdaq Replaces Cybersecurity Chief With Markets Veteran
By Sam Mamudi, Bloomberg
Nasdaq OMX Group Inc. has a new person in charge of the exchange operator’s electronic defenses. Mark Graff, Nasdaq’s chief information security officer since 2012, left the company at the end of last month and his role has been filled by Lou Modano, according to spokesman Ryan Wells. Modano, a senior vice president, will keep his position as global head of infrastructure services. Modano joined Nasdaq in 2009 and previously worked at NYSE Euronext.
jlne.ws/1xEhC6A

MTS and B2SCAN launch initiative to enhance liquidity in credit market
London Stock Exchange
Improves buy-side access to pre-trade information
Initiative gains broad buy-side support
MTS, one of Europe’s premier fixed income trading venues, has launched an initiative with B2SCAN, an aggregator and search engine of bank inventory, runs and axes for the buy-side, which enhances pre-trade information and efficiency for traders on MTS’s BondVision platform in Europe.
jlne.ws/1KlufZs

Composition of GC Pooling® Equity Basket and acceptance of equity collaterals for margining by Eurex Clearing
Eurex
Please find attached the list of admitted equities for collateralisation of trades in the GC Pooling® Equity Basket, effective 15 January 2015.
jlne.ws/1xRzRY2

CME Group And GFI Group Receive Regulatory Approvals For Revised Transaction; Special Meeting Of GFI Stockholders Scheduled For January 27, 2015
CME Group
CME Group Inc., the world’s leading and most diverse derivatives marketplace, and GFI Group Inc., a leading intermediary and provider of trading technologies and support services to the global OTC and listed markets, today announced that they have received all of the material regulatory approvals necessary to close the previously announced acquisition of GFI Group by CME. The transaction remains subject to the approval of GFI Group’s stockholders; GFI Group will hold a special meeting of its stockholders on January 27, 2015 to vote on the transaction.
jlne.ws/1wpQCTW

Reminder: BATS/Direct Edge Integration Update Conference Call on January 7, 2015
On Wednesday, January 7, 2015 at 11 a.m. ET, BATS Global Markets will hold a final conference call to update customers on the implementation progress and schedule for integrating the Direct Edge exchanges to BATS Technology that will complete on Monday, January 12, 2015. During the call, we will provide updates related to BATS/Direct Edge data center moves and latency equalization, the integration timeline, certification requirements, testing opportunities, feature release progress and other information of interest.

Intercontinental Exchange Reports ICE and NYSE Volume for December and Full Year 2014; 18th Consecutive Annual Brent ADV Record
ICE
Intercontinental Exchange (NYSE: ICE), the leading global network of exchanges and clearing houses, today reported December 2014, fourth quarter 2014 and full year 2014 exchange traded volume.
jlne.ws/1tLTZcC

ICE futures raises margins for corn, wheat
Reuters
ICE futures US raises Wheat (IW) initial margins for specs by 7.1 percent to $1,500 per contract from $1,400
jlne.ws/1wUuMa8

TMX Group Consolidated Trading Statistics – December 2014
TMX
TMX Group Limited today announced December 2014 trading statistics for its marketplaces – Toronto Stock Exchange, TSX Venture Exchange, TMX Select, Alpha, Montreal Exchange (MX) and NGX.
jlne.ws/1xEEVgJ

The Chicago Stock Exchange Is Branching Out to Cater to the ‘Underserved’
John D’Antona Jr., Traders Magazine
It gets no respect. Call it the Rodney Dangerfield of stock exchanges – the Chicago Stock Exchange. Oft forgotten amid the happenings of its Goliath big brothers, NYSE Euronext, NASDAQ OMX and BATS/Direct Edge, the nation’s only remaining independent stock exchange, also known as CHX, is reinventing itself. Real change is underway in the Second City.
jlne.ws/1xEHKhB

Hedge Funds & Managed Futures

Flagship Brevan Howard fund reports first annual loss
Miles Johnson, Hedge Fund Correspondent, FT
Brevan Howard has reported the first annual investment loss for its flagship $24bn fund in its history, underlining the difficulties facing one of the world’s largest hedge funds.
jlne.ws/1xRqMhL

Brevan Howard Hedge Fund Extends Streak of Yearly Gains; Brevan Howard’s Flagship Hedge Fund Rebounds to Gain 0.8% in 2014
By Laurence Fletcher
Brevan Howard Asset Management LLP’s flagship $24.2 billion hedge fund has rebounded from a tough start to 2014 to preserve its track record of making money every year.
jlne.ws/14sLub4

Hedge-fund murder suspect ‘charmed’ his way out of trouble
By Emily Smith, Larry Celona and Bob Fredericks, NY Post
The man accused of killing his millionaire Manhattan dad is straight out of the horror flick “American Psycho” — “able to charm .?.?. with his good looks and his waspy background, but behind that, he was dangerous,” a close pal told The Post in an exclusive interview Tuesday.
Hedge-fund murder suspect ‘charmed’ his way out of trouble
jlne.ws/1DklDAp

Pimco Cuts Access to Some Quarterly Investment Reports
By Landon Thomas Jr., FT
The bond giant Pimco has removed from its website the quarterly investment reports of two large mutual funds that were managed by William H. Gross before he was forced to leave the firm last year.
jlne.ws/1HMnLAu

Bill Gross Calls It: 2015 Is Going to Be Terrible
By Ben Steverman, Bloomberg
Bill Gross, bond king, ousted executive, self-styled poet of the markets, has a bold, depressing prediction for 2015, and he’s not couching it in any of his usual metaphor: “The good times are over,” he wrote in his January investment outlook note. By the end of 2015, he goes on, “there will be minus signs in front of returns for many asset classes.”
jlne.ws/1BKH9dq

Soaring Bond Prices May Sound an Economic Warning
By Peter Eavis, NY Times
The United States economy is accelerating, unemployment is falling and wages are even beginning to creep higher. Yet a huge bond market with a strong track record for predicting economic problems is flashing a warning sign right now.
jlne.ws/1s4TdGy

Hedge Fund Founder’s Son Denied Bail in Dad’s Murder
By Patricia Hurtado, Katherine Burton and David Glovin, Bloomberg
The son of Wainscott Capital Management founder Thomas Gilbert Sr., who wanted to follow his dad into the money-management business, was charged with murdering him after police said he staged a shooting to look like suicide.
jlne.ws/1DkeP5y

Biggest Pension Fund Raises Pay for Top Executive by 64%
By Takahiko Hyuga and Shigeki Nozawa, Bloomberg
The head of the world’s largest investor of retirement savings just got a 64 percent pay rise. Japan’s Government Pension Investment Fund will increase total annual compensation of its president to about 31 million yen ($260,000), including salary, bonuses and allowances, according to calculations by Shinichiro Mori, a director at the fund’s planning section. That compares with 18.9 million yen previously slated for the year ending March 31, Mori said by phone. The pay increase is effective this month, he said.
jlne.ws/140O1rB

Investors Pull $26.7 Billion From Pimco Funds in December – Morningstar; Pimco Had Outflows of $150 Billion From Its Mutual Funds in 2014
By Kirsten Grind
Investors pulled $150 billion from Pacific Investment Management Co. last year in the largest-ever annual exodus from a mutual-fund company, according to preliminary figures from research firm Morningstar Inc.
jlne.ws/14ngZT4

The dubious relationship between yields and exchange rates
Matthew C Klein, FT
Professor Krugman has a new post that tries to explain why nominal US sovereign interest rates are higher than nominal euro area bond yields. Much of the piece is useful, especially since he is right that credit risk has nothing to do with the differential between German and American borrowing costs.
jlne.ws/1Dk9viG

Hedge fund scores win for appraisal arbitrage strategy
By Tom Hals, Reuters
A Delaware court has ruled in favor of an increasingly popular strategy in which hedge funds buy the stock of a company targeted in a merger and then litigate for a bigger payout on their shares.
jlne.ws/1zTGXGk

Banks & Brokers

Puzzle Forms in Morgan Stanley Data Breach; Bank Tightens Access to Client Database
By Justin Baer
Last summer, a newly minted Morgan Stanley financial adviser named Galen Marsh started to sift through the account records of some 350,000 of the firm’s clients. Virtually none of them were his own.
jlne.ws/1tOkJsV

Eric Bommensath to leave Barclays
Martin Arnold, FT
Eric Bommensath is leaving Barclays less than a year after the former co-head of its investment bank was put in charge of running down hundreds of billions of pounds in underperforming assets at its “bad bank”.
jlne.ws/1tJ7Bzz

The Rise and Fall of Merrill Lynch, and the Lessons Learned
By Paul Vigna, WSJ
On this day in 1914, a young securities broker named Charlie Merrill opened up shop in a subletted room at 71 Broadway in lower Manhattan, naming the one-man firm Charles E. Merrill & Co. It was an inauspicious start for a company that would come to change the face of Wall Street – only to be swallowed whole by Wall Street at its worst nearly a century later.
jlne.ws/1HMGM5Y

Clearing & Settlement

Bank of China to set up yuan clearing business in Malaysia
Asia First
China’s Central Bank, the People’s Bank of China, announced that Bank of China has been authorized to conduct RMB clearing business in Malaysia’s capital, Kuala Lumpur. This, after the central banks of Malaysia and China signed a mutual cooperation memorandum in November on the RMB clearing arrangements in Malaysia.
jlne.ws/1DktZYC

Hong Kong stock exchange seek to reassure investors over Shanghai trading link
By Michelle Price, Reuters
The Hong Kong stock exchange plans to launch in March a system fix that would help foreign funds work around China’s settlement rules and boost trading volumes in Shanghai shares via a landmark Hong Kong trading link.
jlne.ws/1wUtV9m

Indexes & Products

Vanguard Set to Offer Its First Muni-Bond ETF on Tax-Free Appeal
By Brian Chappatta, Bloomberg
Vanguard Group Inc. plans to offer its first exchange-traded fund focused on the $3.6 trillion U.S. municipal-bond market.
jlne.ws/1AEOYmE

Technology

World Trade Center Towers Fill Slowly in Shift to Tech
By David M. Levitt, Bloomberg
When lower Manhattan’s new World Trade Center was conceived a decade ago, nobody had in mind a Silicon Valley in the sky. Financial companies, which dominated the original twin towers, are scarce among tenants who have committed to space at the complex’s glass-and-steel skyscrapers. Instead, the majority of deals done since magazine publisher Conde Nast agreed to anchor 1 World Trade Center in 2011 have come from technology, media and advertising.
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Enforcement

Financial adviser sentenced for stealing from elderly
by Lisa Cowan, AP
A Bellingham tax and financial adviser convicted of stealing $255,000 from 26 elderly clients has been sentenced to 51 months in prison.
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Environmental & Energy

Oil Slump Heightens Pollution Challenge From Delhi to Shanghai
By Aibing Guo, Abhishek Shanker and Rakteem Katakey, Bloomberg
A brisk walk in India’s capital New Delhi on Christmas Eve was rated ‘hazardous’ to health, while a similar stroll in the Chinese city of Shanghai was ranked ‘unhealthy.’ Two of Asia’s biggest cities with the same problem: Air pollution.
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Harmonisation of PEGAS markets successfully completed; PEGAS markets operated by Powernext – EEX new majority shareholder of Powernext
EEX
The European Energy Exchange (EEX) and Powernext have successfully migrated all active EEX gas market members representing 100 percent of the NCG and GASPOOL Open Interest to Powernext on 1 January 2015. As of now, all natural gas activities of the EEX Group are operated by Powernext under the brand PEGAS. In total, 154 participants are now admitted to trading natural gas products on PEGAS. The formal transfer of the majority shares in Powernext to EEX has been completed.
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What Pretty Earth Photos Mean to Top U.S. Weather Watcher
By Brian K. Sullivan, Bloomberg
The first time Kathryn Sullivan flew into space, in 1984, she looked out the window of the shuttle to see England below. It was a view of Earth that was both “dazzling and wonderful.” At the same time, Sullivan, now the administrator of the National Oceanic and Atmospheric Administration, struggled for a larger meaning and purpose for going into space. Having a great view of the planet and some photographs to prove it were not enough.
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Poland’s power bourse to lower fees to win new players
By Anna Koper, Reuters
* Also plans to extend trading hours on gas market
Aiming for 15 pct rise in gas trading volumes this year
Expects 5 pct increase in electricity trading
Poland’s POLPX power exchange will lower fees and extend trading hours this year to win new customers in its drive to become a regional trading hub, its chief executive said.
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Asia-Pacific

HKEx Monthly Market Highlights – December 2014
HKEx
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Interim Flash Report on USD/CNH Futures
HKEx
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TOCOM Summary Of December 2014 Activities – 2014 Annual Volume At TOCOM
MondoVisione
December Volume Averaged 109,689 Contracts per Day, Down 17.5% M-on-M
The Tokyo Commodity Exchange announced today that average daily trading volume for December 2014 was 109,689 contracts, down 17.5% from November. On a year-on-year basis, it was up 39.7%. Some of TOCOM’s leading commodities saw increases in volume: Crude Oil was up 30.9% to 7,322 contracts and Rubber was up 8.6% to 10,572 contracts. Others such as Gold, the Exchange’s most traded commodity, decreased (down 35.6% to 43,671 contracts) and pushed down overall volume.
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Whither Chinese Commodity Demand? Your Guess Is As Good As Mine
Streetwise Professor
Commodities are down broadly: Oil gets the headlines, but most major commodities-especially industrial commodities-are down, with iron ore leading the pack. The main driver is Chinese demand: perhaps it’s more accurate to say that the main brake is slackening Chinese demand. Forecasting the course of future Chinese demand is challenging, because there is a huge political component to it.
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Shorts in Tokyo Soars to Record on Abenomics Skepticism
By Anna Kitanaka and Toshiro Hasegawa, Bloomberg
Bearish bets on Japanese stocks surged to a record because foreign investors are increasingly skeptical that Prime Minister Shinzo Abe will succeed in reviving the world’s third-biggest economy, said Reorient Group Ltd.
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Dec volume for the Japaenese commodity markets:
www.jcch.co.jp/tokei/wp-content/uploads/December_20141.pdf

2014 annual volume for the Japanese commodity markets:
www.jcch.co.jp/tokei/wp-content/uploads/VOLUME%EF%BC%8826.1-12%EF%BC%891.pdf

Frontier Markets

Securities and Exchange Board of India Notices
Order in the matter of Vadodara Stock Exchange Ltd (VSEL)
Order in the matter of Parshwanath Corporation Limited
Order in the matter of Parshwanath Corporation Limited
Adjudication order against Regent Realtech Ltd (Formerly Known as Modi Hoover International Ltd.)
Adjudication order against Naina Semiconductor Ltd.
Order against Infinity Realcon Limited
Order in respect of Mr.Shreenath Kapoor
Order in respect of SLA Securities Ltd
Consent Order in respect of Kay Jay Leasing Limited
ICICI Prudential India Recovery Fund Sr. 1 to 3
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FMC gives NCDEX nod to launch forwards in 7 more commodities
Business Standard
Regulator says terms of contract should not be changed without prior approval
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Financial Tech board okays sale of Bourse Africa
The Hindu Business Line
Financial Technologies has communicated to the stock exchanges that its board of directors had on Tuesday approved the postal ballot notice to seek shareholders’ approval for the sale of Bourse Africa Ltd by FT Group Investments Pvt Ltd.
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The São Paulo Stock Exchange Expansion Would Be a Good Move
Huffington Post
Though the LatAm capital markets are fighting to ward off further downward movement due to stumbling oil prices and weakening currencies, one long-term strategy that will continue to bring more liquidity to these markets is better corporate governance practices.
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Miscellaneous

News Corp. Corruption Trial All About Greed, Prosecutor Says
By Jeremy Hodges, Bloomberg
A group of journalists at News Corp. (NWSA)’s Sun tabloid bribed public officials because they were “greedy for page one exclusives,” prosecutors told jurors on the first day of a criminal trial in London.
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$10 Million Trading Challenge Underway
DirectFX
Direct FX is a main sponsor for the Quantic Traders Challenge, a live forex trading competition where traders will compete over 6 months for their share at a $10,000,000 equivalent portfolio allocation. Traders can still register for the competition at Directfx.com.
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Thomson Reuters Wins Inaugural GRC Award In Risk Technology Rankings – Company Recognized In Four Separate Categories In Annual Rankings
MondoVisione
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Bitcoin exchange Bitstamp says to resume trading within 24 hours
Reuters
Bitstamp, one of the largest exchanges for the digital bitcoin currency, said on Wednesday it expected to resume trading within 24 hours after suspending operations because of a security breach on Sunday.
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Jitters After Bitcoin Exchange Suspends Services
By Sydney Ember, NY Times
One of the biggest Bitcoin exchanges suspended services on Tuesday, prompting unease in a virtual currency industry already scarred by the collapse last year of Mt. Gox, once its most prominent exchange.
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