First Read

Bits&Pieces
Jim Kharouf – JLN

ICE news comes in threes today. Congratulations on three official promotions there:
Ben Jackson has been named ICE’s chief commercial officer; Lynn Martin, president and COO of ICE Data Services, has added Interactive Data to her responsibilities; and Trabue Bland has been named president of ICE Futures U.S. All three are talented professionals with great market knowledge. Well deserved.

Speaking of ICE (and snow), the Futures Industry Association’s Walt Lukken and the FIA board will ring the closing bell today at the New York Stock Exchange. For full details, see the NYSE Bell Calendar. It’s a thrill and honor, even in these crazy market conditions. FIA is celebrating its global merger into one entity. This will be Walt’s first trip from Washington to New York by sled dogs.

Also, stay tuned for more information about the second FinTech Exchange Chicago event, to be held on April 21. The full lineup of speakers and firms presenting is due out tomorrow. John Lothian News, which covered the event last year, plans to be on hand again. Early-bird registration is open at www.fintechchicago.com. Take a look.

Finally, the fundraising drive by Cathy Lyall, Mark Ibbotson, Clive Furness and Andy Ross called the Futures For Kids, or FFK Downsizing Challenge, is getting closer to its goal of raising £3,000. All four have committed to lose weight and get in shape over the first three months of this year and looking great by Boca. Now almost one-third of the way there, they have raised £2,710.16 to date. The weight goals are the following: Mark 111.1kg target 98.4kg; Andy 119.7kg target 103kg; Clive 101.6kg target 90kg; and Cathy 79 kg target 65kg. Don’t ask what that is in the US. It’s the metric system. Meanwhile, Oprah claims she’s lost 26 pounds this year, but that’s for Weight Watchers. This is far better. To support their efforts go to www.justgiving.com/ffkdownsizing

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Douglas Diamond to receive CME Group-MSRI Prize in Innovative Quantitative Applications
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, and the Mathematical Sciences Research Institute (MSRI) announced Douglas Diamond, Professor of Finance at the University of Chicago, as the 2015 recipient of the CME Group-MSRI Prize in Innovative Quantitative Applications. A ceremony honoring Diamond will take place at CME Group Headquarters on Monday, Feb. 1, at 10:00 a.m. CT and will feature a dynamic discussion on the topic of non-bank runs and financial crises.
goo.gl/zNDrCB

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John Fennell, OCC – Clearing – Providing Confidence to Financial Markets
MarketsWikiEducation.com

“In the past, settlement – the movement of securities and cash – is what you would associate with clearing. That changed as a result of the financial crisis. When you have banks like Bear Stearns and Lehman Brothers defaulting, confidence becomes the bigger issue.”

Historically, clearing has not exactly been part of the “glamorous” side of trading. In fact, it has been looked at as a utility, like electricity and plumbing. But that all changed during the financial crisis. Clearing is not just about moving contracts through the pipes; it is also about the guaranteeing performance of those contracts.

OCC’s John Fennell says that, these days, clearing is where it’s at – an area of the market where one can innovate while managing those tail risks (or, “Lehman Moments”). It is also an area of the market that is enjoying solid growth. For newcomers looking for career opportunities, it doesn’t get any more glamorous than that.

Watch the video »
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Top 50 Chicago startups to watch in 2016
Andreas Rekdal – Built in Chicago
Judging by the numbers in our 2015 Chicago startup report, Chicago tech just had its best year ever. This city was built on industry, however, so there’s no reason to think the tech community is about to rest on its laurels. Which companies will be at the vanguard of Chicago’s innovation in 2016? Just like last year, we’ve picked 50 startups we think are worth watching. To be included in our list, companies had to be digital tech-centered and founded within the last five years.
goo.gl/nCYvwa

***DA: Our friends at Green Key Technologies made the list.

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FIA To Ring Closing Bell At New York Stock Exchange To Celebrate Global Merger
Mondovisione
FIA President and CEO Walt Lukken will be joined by FIA’s board at the New York Stock Exchange to ring the closing bell on Wednesday, January 27, 2016 at 3:56 pm ET.
goo.gl/Y1DuKb

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Reg AT Stirs Concerns Ahead of CFTC TAC Meeting
Sarah Rudolph – JLN
The CFTC’s Technology Advisory Committee (TAC) was scheduled to meet on Tuesday to discuss three issues important to the trading industry: 1) the Regulation Automated Trading (Reg AT); 2) swap data standardization and harmonization; and 3) the potential of blockchain and distributed ledger technology to the derivatives market.
goo.gl/rQmidq

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SIGN-UP TO RECEIVE INSIDE ADVANTAGE
Advantage Futures
In order to stay up-to-date on any new developments at Advantage Futures including new product announcements, seminars/webinars, company announcements, and our special events information please fill out the form below. Mailing address is required to receive our Inside Advantage quarterly publication
goo.gl/Yoj56X

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Yesterday’s Top Three
DTCC ruled the day in terms of clicks, grabbing the top two spots with its new white paper on blockchain – FT Alphaville’s view, “DTCC cuts through the blockchain hype” followed by the press release. Third place was the FT barnburner Cattlemen lock horns with futures exchange over market volatility. Blockchain and rawhide – there’s a joke in there somewhere, I’m sure.

Lead Stories

Intercontinental Exchange Announces Senior Management Promotions
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges, clearing houses and data services, announced the following leadership appointments effective Monday, February 1, 2016, each of which will report directly to ICE Chairman and CEO Jeffrey C. Sprecher.

  • Ben Jackson, President and COO of ICE Futures U.S., has been named ICE’s Chief Commercial Officer.
  • Lynn Martin, President and COO of ICE Data Services, has added responsibility for Interactive Data, which ICE acquired in December 2015, to her leadership of ICE’s global data operations.
  • Trabue Bland, ICE Vice President of Regulation, has been named President of ICE Futures U.S.

goo.gl/lJBxuY

Tech Startup Funding Frenzy Prompts SEC Scrutiny of Brokers
David Michaels – Bloomberg
Chair White says agency concerned about `aggressive promoters’
Investors clamoring for stock as companies stay private longer
Slumping valuations for once-hot technology companies after they go public are drawing increased scrutiny from U.S. regulators.
goo.gl/7ILUoX

CalPERS renews participation in OCC repurchase facility
Pensions & Investments
CalPERS this month renewed its agreement to participate in a fully committed repurchase facility with derivatives clearinghouse Options Clearing Corp. and securities lending agent eSecLending LLC. The $278.4 billion California Public Employees’ Retirement System, Sacramento, will provide contingency liquidity in the event of a counterparty default, under terms of the repurchase facility to which it originally agreed last year. eSecLending serves as the agent for CalPERS.
goo.gl/BGiS7l

Eurex delays Asia launch again to late 2017
Futures & Options World
Deutsche Boerse has again pushed back the launch of its new Asian exchange and clearing house, this time to the end of next year, as the German group awaits regulatory approval from the Monetary Authority of Singapore for the exchange. The group is now aiming to launch Eurex Asia and Eurex Clearing Asia in Singapore in the second-half of 2017, a spokesperson told FOW before declining to comment further.
goo.gl/PdcKWG

IDC chief exec Daffron departs after ICE deal
Futures & Options World
Interactive Data has parted ways with its chief executive and president Stephen Daffron less than a month after the data giant was acquired by the Intercontinental Exchange for $5.2bn. Daffron left his role as chief executive of Interactive Data Corporation (IDC) at the beginning of the year, according to sources.
goo.gl/7b8FZU

A Supreme Court Victory for Climate and Free Markets
By Editorial Board – Bloomberg
In a victory for both environmental and free-market principles, the Supreme Court has just made it easier for the U.S. to cut carbon emissions. Its decision rests on the proposition that the laws of supply and demand can be used to address climate change.
goo.gl/k1xfWC

NYSE proposal to limit dark pool trading put under review by SEC
BY JOHN MCCRANK, Reuters
Plans by the New York Stock Exchange to limit trading in so-called “dark pools” during an industry-wide experiment aimed at boosting trading in small-cap stocks have been put under review by the U.S. Securities and Exchange Commission.
goo.gl/ZJ6Ors

HOTSPOT ANNOUNCES NEW SERVICE TO ALLOW CUSTOMERS
TO BUILD PRIVATE LIQUIDITY POOLS; Launch of Hotspot Link Follows Significant Customer Demand for Custom Solutions
BATS Trading
NHotspot, a leading institutional foreign exchange (FX) market owned and operated by BATS Global Markets (BATS), today announces the launch of Hotspot Link, a new service designed to allow clients to design unique, relationship-based, liquidity pools to meet their specific trading needs.
goo.gl/ulTlP4

RBS Warns of Loss After Raft of Charges; Charges include provision for looming U.S. settlement over sale of mortgage-backed securities
By MAX COLCHESTER – WSJ
Royal Bank of Scotland Group PLC on Wednesday warned it would slump to yet another full-year loss after it put aside £2.5 billion ($3.59 billion) to cover a slew of regulatory issues, including a looming settlement with U.S. authorities over the sale of mortgage-backed securities.
goo.gl/Hs2CW7

Europe’s most accident-prone bank can’t pick itself off the ground
Jason Karaian – Quartz
The beleaguered British bank, still majority owned by the government seven years after its bailout, dropped a welter of new litigation charges and writedowns on shareholders in an unscheduled announcement today (Jan. 27).
goo.gl/s4Ad9d

Fees on Mutual Funds and ETFs Tumble Toward Zero; Loss leaders’ boost returns for investors but come with new risks; gasps at Goldman Sachs
By JASON ZWEIG and SARAH KROUSE – WSJ
In November, asset manager BlackRock Inc. said it would slash by more than 50% the annual expenses charged to investors in an exchange-traded fund that aims to mimic the performance of the entire U.S. stock market.
goo.gl/aGcAkn

Taiwan and SGX sign cross-border trading deal; Co-operation between Singapore and Taiwan will eventually lead to cross-exchange trading in the two countries.
By John Bakie – The Trade
The Taiwan and Singapore exchanges have created a strategic partnership which will see TWSE become a remote trading member of Singapore.
goo.gl/3SgVOI

Former Wall Street banker buys Phibro from Occidental Petroleum: FT
Reuters
A partnership founded by Simon Greenshields, former global co-head of commodities at Morgan Stanley (MS.N), has bought Phibro LLC from Occidental Petroleum Corp (OXY.N), the Financial Times reported.
goo.gl/mLbqdl

Activist Investors May Have Met Their Match: A Down Market
By STEVEN DAVIDOFF SOLOMON – NY Times
The stock market slump has hit activist hedge funds particularly hard, raising the question of whether shareholder activism can survive a down market.
goo.gl/NkaJnx

What ‘Panic’ Meant to Investors 143 Years Ago
By JASON ZWEIG – WSJ
With China’s stock market crumpling another 6%, it’s worth looking back at the financial history of the word “panic” to see whether its past offers any hints about what investors can expect in the present and the future. What is a market panic, anyway? I defined it this way in my book “The Devil’s Financial Dictionary”:
goo.gl/Kdz8uE

Liquidity Is King, or Why CME’s Failure in Cocoa Doesn’t Amount to a Hill of Beans
The Streetwise Professor
The WSJ reports that the CME Group’s new Euro-Denominated cocoa futures contract is floundering, due to a pronounced lack of liquidity. (h/t @libertylynx) The incumbent ICE Futures Europe Sterling-denominated and ICE Futures US USD-denominated contracts dwarf the CME contract’s volume, even though European hedgers face some currency risks in using these contracts.
goo.gl/zgMWJP

Why Your Business Really Is Only As Valuable As Your Customers
ValueWalk
Many businesses will say that their customers are their most valuable assets, but few understand how true that is — or how accurately a measurement of customer-based value can price their whole enterprise.
goo.gl/vk8ifY

Crowdfunding is getting less risky as failure rates fall dramatically, according to Beauhurst
by Madeline Ratcliffe – City AM
Crowdfunding is getting less risky, as the failure rate of equity-crowdfunded seed-stage companies in the UK falls to an all-time low.
goo.gl/buwgor

A Big Trader Just Joined Criticism of Key Stock Market Service
Annie Massa – Bloomberg
KCG says U.S. stock market’s benchmark data feed is sluggish; Wall Street regulator recently drew attention to data speeds
To one of the U.S. stock market’s biggest traders, the decades-old central system that broadcasts prices to investors is sluggish and should be replaced. That conclusion, from a KCG Holdings Inc. report released Monday, echoes calls from other traders to overhaul the way information is collected and distributed in the market. The object of KCG’s scorn is the consolidated data feed known as the SIP, which collects and redistributes prices from 12 stock exchanges and dozens of alternative venues. The most sophisticated traders shun it, instead basing trading decisions on faster sources bought directly from exchanges.
goo.gl/LRBl11

Regulatory

New FCA boss Andrew Bailey warns City asset managers on transparency; Andrew Bailey, chosen this week to lead the Financial Conduct Authority, said the emerging market rout reinforces need for transparency
Marion Dakers – The Guardian
Andrew Bailey, the next head of Britain’s financial watchdog, has warned the biggest investment firms to be upfront about their exposure to risky and illiquid assets, particularly in the wake of recent turmoil on global markets.
goo.gl/by031I

Massad says CFTC to consider alternatives to swap threshold measure
Anjelica Tan, MLex
The US Commodity Futures Trading Commission will explore alternative measures of derivatives trading activity to the notional value now used to determine who is a dealer, Chairman Timothy Massad said. Problems were discovered with this metric in a recent staff study. The CFTC requires registration by dealers with at least $8 billion in swaps business as measured by notional value.
goo.gl/gDUJW0

Esma in clearing deals with S. Africa, Mexico
Futures & Options World
The European Securities and Markets Authority (Esma) on Tuesday announced agreements with South African and Mexican regulators over the supervision of clearing houses from both jurisdictions that have applied to be recognised under the European Markets Infrastructure Regulation (Emir). The Memorandum of Understanding (MoU) establish cooperation arrangements including the exchange of information between the jurisdictions, clearing the way for the official recognition of South African and Mexican clearing houses to provide clearing services to European firms, under Emir.
goo.gl/CzZ0W1

Bond Dealers Tell U.K. Debt Office Their Job Is More Onerous
Lucy Meakin, Anchalee Worrachate – Bloomberg
GEMMS, investors raised concerns at consultion with DMO; Debt office saw lowest auction demand since 2009 this month
Tighter regulations are making it increasingly difficult to sell U.K. government bonds. That’s the message from gilt market makers and investors.
goo.gl/DaZl1c

Exchanges & Trading Facilities

Taiwan Stock Exchange and Singapore Exchange sign Strategic Partnership Agreement, TWSE subsidiary to join SGX as remote trading member
SGX
Taiwan Stock Exchange (TWSE) and Singapore Exchange (SGX) today announced the establishment of a strategic partnership, where a subsidiary of TWSE, Global Link Securities Co. Ltd, will join SGX as a remote trading member, a significant first step towards wider partnership between the two exchanges.
goo.gl/48vOrk

Eris Launches Major Expansion of Standard Swap Futures
PRNewswire/
Eris Exchange (Eris), a U.S.-based futures exchange offering swap futures as a regulatory-compliant and capital-efficient alternative to OTC swaps, announced the expansion of its flagship Eris Standard U.S. Dollar Interest Rate Swap Future complex on January 11th. This launch follows a record year in 2015 for Eris Exchange in terms of volume, open interest, trade count, and number of participants, as well as the addition of multiple new Liquidity Providers, clearing firms, and execution platforms.
goo.gl/iuTpgC

LME to introduce data usage fees in April
Futures & Options World
The London Metal Exchange is to introduce in April new charges on data usage, the latest step in commercialisation at the HKEx-owned group. The British metals exchange will on April 4 2016 introduce a new market data usage policy that requires firms to obtain a licence if they use LME data for valuations, pricing or reference purposes.
goo.gl/O4oi3l

S. Africa Exchange Sees Beef-Hedge Need as Drought Spurs Grains
Tshepiso Mokhema – Bloomberg
Carcass contract rises 6% since trading began in mid-December; Stock exchange aims to extend tool used in drought to beef
South Africa’s stock exchange is hoping beef producers and investors will turn to new futures contracts to hedge risks from price swings, following the grain industry’s lead after the worst drought in more than a century pushed corn costs to a record high.
goo.gl/PzorX2

ICE appoints Jackson to lead acquisition strategy; ICE promotes senior director as part of a reshuffle of key managers in the business.
By Joe Parsons – The Trade News
IntercontinentalExchange (ICE) has promoted Ben Jackson to lead the exchange group’s acquisition and joint venture strategy.
goo.gl/e7zQh3

Swaps Execution: The Dogs Still Don’t Eat the Dog Food When They Have the Choice
The Streetwise Professor
The Bank of England has received a lot of attention for its just-released study on the liquidity impact of swap execution facilities (SEFs). It finds that:
goo.gl/53ZJbE

High-frequency traders in charge at NYSE
Nicole Bullock in New York – FT
On the floor of the New York Stock Exchange, high-frequency traders are now in charge. On Tuesday Barclays became the last of the big investment banks to relinquish the once-hallowed “designated market maker” status by selling its business to GTS, a high-speed trader that accounts for 3-5 per cent of daily cash equities volume in the US.
goo.gl/MXajIe

Tokyo Commodity Exchange: Additional Changes To The Rules And Regulations For The New System
Mondovisione
Further to the news release dated October 21, 2015, the Exchange announced additional changes to its Rules and Regulations that have been proposed to take place at the launch of the new trading system in September. TOCOM kindly requests market participants to review them here.
goo.gl/D8BTsz

Eurex Exchange’s Fixed Income Futures & Options – highlights of Q4/2015
Eurex
2015 has been a year characterized by the return of volatility. Looking back at the last twelve months, our markets were driven, amongst other things, by the following:
goo.gl/M1IUtw

A. Single Stock Futures: Introduction of ten SSFs, Single Stock Dividend Futures: Introduction of three SSDFs; B. Equity options: Introduction of one equity option due to corporate actions
Eurex
The Management Board of Eurex Deutschland and the Executive Board of Eurex Zürich AG took the following decisions with effect from 1 February 2016:
/goo.gl/o3JQy1

Politics

Michael Bloomberg’s 2016 Ambitions May Shake Up The Race — And His Media Company
Michael Calderone – Huffington Post
Bloomberg, the media company, made a big bet on the 2016 election by dropping millions on star political journalists Mark Halperin and John Heilemann, launching a new politics site and producing a daily Bloomberg TV show that’s also simulcast on MSNBC.
goo.gl/e0ze8I

Bloomberg weighs lesson of Roosevelt’s failed run for presidency
Courtney Weaver in Washington – FT
Frustrated with the path of William H Taft, his chosen successor, Roosevelt decided to take another shot at the presidency having already occupied the White House from 1901 to 1909. So he created his own Progressive Party, commonly known as the Bull Moose Party, and put himself on the top of the ticket.
goo.gl/tqgFEP

Mike Bloomberg Is Worth $49 Billion, Much More Than Most People Thought
Edmund Lee – re/code
Forbes says Mike Bloomberg is worth $35.6 billion. Donald Trump says it can’t be that much. They’re both wrong. Here’s the real number: $48.8 billion.
goo.gl/NFqucH

The economic losers are in revolt against the elites
Martin Wolf – FT
Losers have votes, too. That is what democracy means — and rightly so. If they feel sufficiently cheated and humiliated, they will vote for Donald Trump, a candidate for the Republican party’s presidential nomination in the US, Marine Le Pen of the National Front in France or Nigel Farage of the UK Independence party. There are those, particularly the native working class, who are seduced by the siren song of politicians who combine the nativism of the hard right, the statism of the hard left and the authoritarianism of both.
goo.gl/C5R60w

Hedge Funds & Managed Futures

Bridgewater’s Dalio Now Has the Most Profitable Hedge Fund
Nishant Kumar – Bloomberg
Ray Dalio of Bridgewater Associates overtook billionaire George Soros in 2015 as the man behind the hedge fund that has made the most money for investors in the history of the industry, according to an annual ranking.
goo.gl/bafKyD

Billionaire Ray Dalio Has Produced More Dollar Gains Than Any Other Hedge Fund Manager Ever
Nathan Vardi – Forbes
Ray Dalio is one of the most successful hedge fund managers ever and by one measure he is once again the top hedge fund investor of all-time, according to a report released on Tuesday.
goo.gl/oqZGUS

World Bank slashes 2016 oil price forecast
Reuters
The World Bank has slashed its forecast for crude oil prices by $14 to $37 per barrel for 2016, it said on Tuesday, amid growing supply and weak demand prospects from emerging markets. In its annual Commodity Markets Outlook, the World Bank lowered its price forecast for 37 of 46 commodities, including oil, saying that weak demand from emerging economies is likely to continue.
reut.rs/204B6kf

Ackman acknowledges mistakes in 2015, details changes in portfolio
BY SVEA HERBST-BAYLISS – Reuters
Sitting on a double-digit loss that is the deepest in his firm’s history, billionaire investor Bill Ackman on Tuesday told investors that he made mistakes last year in not cutting two big positions but said he sees plenty of new investment opportunities.
goo.gl/2H5QCm

Robo-advisory: Tech that will unleash an investment revolution
By Mike Foster – Financial News
Twenty years ago European banks started to put together online platforms from which customers and their advisers could pick investment funds with just one click. The managers who understood their importance and negotiated a prominent position tapped into a new army of investors.
goo.gl/giMFcr

Bill Ackman falls out of all-time top hedge fund list
Miles Johnson – FT
Bill Ackman has fallen out of a list of the top 20 best-performing hedge fund managers of all time one year on from breaking into it after his Pershing Square fund lost several billion dollars over 2015.
goo.gl/xOLbiC

Bill Ackman apologises to investors for poor 2015
Stephen Foley in New York – FT
Bill Ackman has written a mea culpa to the investors in his hedge fund, Pershing Square, after it suffered the worst year in its history.
goo.gl/Dzr0iK

Banks & Brokers

RBS Trader Fired in Currency Probe Wins Suit, But No Money
Patrick Gower, Richard Partington – Bloomberg
RBS failed to follow the correct process before firing trader; Judge awards no damages as Drysdale was guilty of misconduct
A former senior trader at Royal Bank of Scotland Group Plc who lost his job amid the currency market rigging scandal won part of an employment lawsuit, but received no compensation because a London judge said he would have been fired anyway.
goo.gl/ZGylyC

INTL FCStone Financial Issues 2015 Trading Statistics – Ranks As The #1 Market Maker For International Equities Traded OTC; #1 Ranking market maker by dollar value traded OTC; #1 Ranking market maker in ~2,500 securities; Added 45% of all new foreign securities and ADRs to the OTC Market Alternative Trading System; Averaged 1.13 executions per order OTC; Provided liquidity at ~3:1 ratio
INTL FCStone Inc. via Mondovisione
INTL FCStone Inc. (NASDAQ:INTL), a diversified global financial services organization delivering execution and advisory services in commodities, currencies, and securities, today announced that the broker-dealer division of its wholly owned subsidiary, INTL FCStone Financial Inc. (“the Company”) ranked as the #1 market maker in 2015 for international securities traded over-the-counter, as well as ranking #1 by dollar value for approximately 2,500 securities, according to Bloomberg rankings. INTL FCStone Financial also disclosed today that in 2015 it added 192, or ~45% of all new foreign securities and American Depositary Receipts (“ADRs”) to the OTC Market.
goo.gl/sjZOS3

Goldman names new head of US power trading
Risk.net
Other commodities moves at BTG Pactual, EDF Trading, Javelin and Munich Re
goo.gl/njlRaR

GOLDMAN SACHS REPORTS 2015 EARNINGS PER COMMON SHARE OF $12.14 AND FOURTH QUARTER EARNINGS PER COMMON SHARE OF $1.27; RMBS WORKING GROUP SETTLEMENT REDUCED EARNINGS PER COMMON SHARE BY $6.53 FOR 2015 AND BY $3.41 FOR THE FOURTH QUARTER
Goldman Sachs
goo.gl/vLYYdA

GOLDMAN SACHS ANNOUNCES LAUNCH OF DEGREE APPRENTICESHIP PROGRAMME
Goldman Sachs
Goldman Sachs is today announcing the launch of an apprenticeship programme in London, in partnership with Queen Mary University of London (QMUL). From Autumn 2016, a class of apprentices will join the ‘Degree Apprenticeship Programme’, a flagship scheme launched by the UK government in March 2015.
goo.gl/UiYbsh

Crédit Agricole plans overseas expansion of wealth management
Michael Stothard in Paris – FT
Crédit Agricole is planning a rapid expansion of its wealth management business beyond its traditional base in mainland Europe, according to the chief executive of the division.
goo.gl/WlKO9C

R.B.S. Expects to Report an Annual Loss for 2015
By CHAD BRAY – NY Times
The Royal Bank of Scotland said on Wednesday that it would report an annual loss for 2015 after taking a series of charges to close a deficit in its pension plan and to resolve past misconduct.
goo.gl/qNRj7j

FXCM Amends Stockholder Rights Plan
By GlobeNewswire
FXCM Inc. / FXCM Amends Stockholder Rights Plan . Processed and transmitted by NASDAQ OMX Corporate Solutions. The issuer is solely responsible for the content of this announcement
goo.gl/Mfxnsw

Clearing & Settlement

CalPERS renews participation in OCC repurchase facility
Pensions & Investments
CalPERS this month renewed its agreement to participate in a fully committed repurchase facility with derivatives clearinghouse Options Clearing Corp. and securities lending agent eSecLending LLC. The $278.4 billion California Public Employees’ Retirement System, Sacramento, will provide contingency liquidity in the event of a counterparty default, under terms of the repurchase facility to which it originally agreed last year. eSecLending serves as the agent for CalPERS.
goo.gl/BGiS7l

Five takeaways from DTCC’s blockchain white paper
Financial News
Blockchain has attracted increasing interest from financial institutions because many believe it has the potential to simplify post-trade services and reduce related costs. In a white paper published on January 25, DTCC, which is one of the world’s largest providers of these services, aims to “cut through the hype” surrounding bitcoin’s underlying technology and provide guidance on how it believes it can be used to improve existing business models and legacy systems in the post-trade space. On January 21, the US-based group revealed that it had backed Blythe Masters’ blockchain startup Digital Asset Holdings, alongside 13 other large financial institutions including Icap, Deutsche Börse, JP Morgan and Santander.
Here are some of the most interesting takeaways from the white paper:
goo.gl/wW7xxp

The fintech revolution that promises to finish off the big bad banks for good –
Yahoo Finance UK
All this could be about to change. Under the catch-all heading of the “fintech revolution”, a whole host of technologies are under development that promise a genuine alternative to traditional banking and payments systems. Most people will have heard of crowdfunding, peer to peer lending and robo-financial advice. These are early examples of the rival models that digital technologies make possible. Yet so far, they are also small beer, and certainly don’t pose any kind of existential threat to the traditional banking cartel.
/goo.gl/BL71pf

Performance Bond Requirements: Energy, Equity, Interest Rates and Agriculture Margins – Effective 01/27/16
CME Group
goo.gl/oQ7tsK

Banks hold advantage in clearing contract talks
Risk.net (Subscription Required)
Buy side losing battle with prospective clearing members Buy-siders are locked in negotiations with their prospective clearing members as they discuss terms ahead of the introduction of mandatory clearing of over-the-counter derivatives – and it’s a fight they are losing. Buy-side firms want certainty over things like how they port trades from one clearing member to another or how they unwind positions. Banks on the other hand want to attach conditions to anything they promise
goo.gl/HgNeHo

Indexes & Products

NYSE’s $2 Trillion ETF Business Sees Heightened Competition
Annie Massa – Bloomberg
A record 23 exchange-traded funds left NYSE Arca in 2015; BlackRock is watching closely following wild Aug. 24 session
NYSE Group Inc. may still be the king of exchange-traded funds among U.S. stock markets, but challengers to the throne are gaining ground.
goo.gl/3SJZlG

Euronext Amsterdam welcomes 52 UBS Asset Management ETFs
New issuer marks strong growth of Dutch ETF market
Euronext
Today Euronext Amsterdam welcomed UBS Asset Management,a large-scale asset manager with long experience in the field of ETFs and index investing,as its new ETF issuer. UBS Asset Management listed 52 new ETFs on Euronext Amsterdam, which brings the total to 207.
/goo.gl/Wlxenx

South Korea to Ease Stock Trading in MSCI Developed Status Quest
Bloomberg Business
South Korea plans to make it easier for foreign investors to trade local stocks as the country seeks the status of a developed nation in MSCI Inc.’s equity indexes. The Financial Services Commission will introduce a single, so-called “omnibus account” for foreigners trading local stocks, the regulator said in a statement. The change will bring to an end an unpopular rule that currently requires offshore money managers to buy or sell shares through a separate account for each of their funds.
bloom.bg/204A0VJ

Oil’s Viscosity
Kevin Horan – Indexology – S&P Dow Jones Indices
It goes without saying that if your car’s engine (or any other combustible engine) does not have the lubrication effect of oil then the friction of movement will lead to overheating and engine damage. Currently oil is having its own effect on markets as low prices are leading to concerns of lower future earnings.
The price of crude oil futures is currently quoted at USD 30.6. The S&P GSCI Crude Oil is down 15.86% YTD on a total return basis. The yield of the S&P/BGCantor Current 10 Year U.S. Treasury Index touched a low of 1.99% last week and eventually closed the week at 2.05% on Friday, Jan. 22, 2016. The quote for Monday, Jan. 25, 2016, is 2.02%.
goo.gl/jIUY2L

Technology

Nasdaq to Provide SMARTS Market Surveillance Technology to Nigerian Stock Exchange
Nasdaq
Nasdaq (Nasdaq:NDAQ) and the Nigerian Stock Exchange (“The Exchange” or “NSE”) have announced that NSE, which services the largest economy in Africa, will acquire Nasdaq’s SMARTS Market Surveillance platform to power their compliance program. The technology will provide NSE with the surveillance expertise needed to grow and expand the market and equip the exchange with the surveillance tools necessary to monitor for market manipulation, including spoofing and layering. NSE also uses Nasdaq’s X-Stream trading platform as its trading engine.
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Digital Asset Holdings says Linux Foundation partnership boosts critical Hyperledger development
By Renee Caruthers – Fierce Finance
Fresh from the completion of a major funding round, Digital Asset Holdings said its announcement last month that it was moving its Hyperledger platform to the Linux Foundation has been critical to further developing the platform. In just one month since the Linux Foundation announced a collaborative effort to advance blockchain technology, the project has become one of the efforts with the most participation requests in Linux Foundation history, according to a Digital Asset announcement.
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In charts: why oil prices are influencing global equity markets
Michael Mackenzie and Katie Martin – FT
Length of correlation between the two is set to shape investment allocation decisions
Global financial markets are seemingly at the mercy of the oil price, with falls and rebounds in the commodity setting the tone for equities and other asset classes.
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Oil’s Drop Makes It Cheaper to Fill Up in Houston Than Abu Dhabi
Mohammed Sergie, Anthony Dipaola – Bloomberg
Drivers in the U.S. oil hub of Houston can fill their tanks for less than the cost in Abu Dhabi and Dubai for the first time since 2008 as falling crude prices push Middle East exporters to cut government fuel subsidies.
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Enforcement

Regulators to Return $21.5 Million to Hedge Fund Shut After Raid
By MATTHEW GOLDSTEIN – NY Times
A little more than five years after federal agents raided the offices of Level Global Investors, securities regulators are returning $21.5 million in settlement money that the hedge fund paid to resolve an insider trading investigation.
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RBS hit by almost $3.6 billion in charges
By MAX COLCHESTER – MarketWatch
Royal Bank of Scotland Group PLC on Wednesday warned it would slump to yet another full-year loss after it put aside GBP2.5 billion ($3.59 billion) to cover a slew of regulatory issues, including a looming settlement with U.S. authorities over the sale of mortgage-backed securities.
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Environmental & Energy

Two US shale producers slash capital spending plans
Ed Crooks in New York – FT
Two of the leading US shale oil producers have announced steep cuts in their planned capital spending, as they set their budgets to respond to the collapse in crude prices.
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From the Nile to the Amazon, climate change threatens hydropower
Fred Pearce – The Guardian
From the Amazon to the Nile to the Mekong, rivers are a lifeblood for many nations, filling taps and irrigation canals and generating hydroelectricity that is powering economic development. But a new study warns that changes to river flows caused by climate change threaten that. Thousands of hydrodams risk being left high and dry by mid-century as global warming takes hold.
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Saudi Arabia plans to diversify from oil. That hasn’t gone so well in Brunei
Aamna Mohdin – Quartz
Saudi Arabia, once the world’s largest energy producer before the US took over with huge amounts of shale gas, is facing its biggest economic challenge in a decade. Oil prices continue to crash with no clear end in sight; last week, the price of oil fell below the price of an actual barrel. The IMF says Saudi Arabia is in danger of draining its financial reserves within five years.
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Asia-Pacific

More brokers expected to outsource Asia technology; Instinet tells The TRADE brokers need to embrace technology outsourcing, as banks continue to pull back from Asia Pacific region.
By Hayley McDowell- The Trade News
Instinet has told The TRADE brokers need to embrace technological outsourcing, as western banks continue to pull back from Asia.
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China’s economic leaders struggle to explain thinking to world
Tom Mitchell in Beijing and Gabriel Wildau in Shanghai – FT
Henry Kissinger’s famous question about the EU — “who do I call if I want to call Europe?” – now has a Chinese variant: who do investors turn to for guidance on Beijing’s monetary and currency policies?
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Morgan Stanley president Kelleher says China ‘is just fine’
Reuters
China is “just fine” and the recent worries about its economy was just an excuse to sell the market off after a good run, Morgan Stanley (MS.N) President Colm Kelleher said on Wednesday.
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Hedge funds betting against China eye “Soros moment”
BY PATRICK GRAHAM
A handful of mainly U.S.-based macro hedge funds have led bets against China’s yuan since late last year and the coming weeks should tell how right they are in predicting a devaluation of between 20 and 50 percent.
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Frontier Markets

Debt option and capital projects funding
The Nation Nigeria
Nigeria is facing its harshest time ever with the drop in its revenue caused by the drop in oil price. The fall in crude oil price began in June 2014, and it has dipped by about 70 per cent by last Monday. Since the country relies solely on oil revenue, it has been tough for the fiscal authorities.
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IMF extends Kenya’s existing credit facility
Citizen
Kenya’s $680 million standby credit with the International Monetary Fund has been extended to March as both sides work on a new facility with similar features, the IMF’s resident representative said. The East African nation secured the year-long, insurance-type loan in February last year to help it deal with any unforeseen shocks that could threaten economic stability.
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Canadian investment platform plays matchmaker for public and private funds
Radio Canada
It’s called Convergence and its proponents say it is on the cutting edge of rapidly developing field of blended finance. Headquartered in Toronto, Convergence helps public and private investors find and connect with each other to co-invest in emerging and frontier markets.
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NSE shareholders move Sebi to block restructuring plan; They want the exchange’s restructuring plan aborted as it could delay its IPO and lead to huge tax liabilities
Ashley Coutinho – Business Standard
A group of nine investors — mostly foreign private equity players which together hold about 20 per cent stake in the National Stock Exchange of India (NSE) — have written to the Securities and Exchange Board of India (Sebi) to apprise it about the shareholders’ opposition to the exchange’s restructuring plan. This follows the letter dated January 13 written by the same group to the chairman of the exchange on the same issue.
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Miscellaneous

Unclear expectations the top source of stress amid workplace change
Stressed?
Alexia Elejalde-Ruiz – Chicago Tribune
Job stress jumps when there is change at work — a near constant in today’s environment — and employees say the most stressful part is not knowing what managers expect of them.
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The Flash Crash: A New Deconstruction
Eric M. Aldrich, University of California, Santa Cruz, Joseph Grundfest, Stanford University Law School, Gregory Laughlin, University of California, Santa Cruz
On May 6, 2010, in the span of a mere four and half minutes, the Dow Jones Industrial Average lost approximately 1,000 points. In the following fifteen minutes it recovered essentially all of its losses. This “Flash Crash” occurred in the absence of fundamental news that could explain the observed price pattern and is generally viewed as the result of endogenous factors related to the complexity of modern equity market trading. We present the first analysis of the entire order book at millisecond granularity, and not just of executed transactions, in an effort to explore the causes of the Flash Crash. We also examine information flows as reflected in a variety of data feeds provided to market participants during the Flash Crash. While assertions relating to causation of the Flash Crash must be accompanied by significant disclaimers, we suggest that it is highly unlikely that, as alleged by the United States Government, Navinder Sarao’s spoofing orders, even if illegal, could have caused the Flash Crash, or that the crash was a foreseeable consequence of his spoofing activity. Instead, we find that the explanation offered by the joint CFTC-SEC Staff Report, which relies on prevailing market conditions combined with the introduction of a large equity sell order implemented in a particularly dislocating manner, is consistent with the data. We offer a simulation model that formalizes the process by which large sell orders of the sort observed in the CFTC-SEC Staff Report, combined with prevailing market conditions, could generate a Flash Crash in the absence of fundamental information. Our research also documents the emergence of heretofore unobserved anomalies in market data feeds that correlate very closely with the initiation of and recovery from the Flash Crash. Our analysis of these data feed anomalies is ongoing as we attempt to discern whether they were a symptom of the rapid trading that accompanied the Flash Crash or whether they were causal in the sense that they rationally contributed to traders’ decisions to withdraw liquidity and then restore it after the anomalies were resolved.
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