First Read

Bits & Pieces
By John J. Lothian
First the sad news. CNBC and “Futures Now” contributor Rich Ilczyszyn died on Saturday at the age of 46, CNBC reported. Ilczyszyn was the founder of iiTrader, an independent introducing broker. He had spent much of his career on the trading floor working for Lind Waldock and later MF Global. My condolences to his family and friends.

Next the stupid news. Who is Mike Callahan? Well I know a couple of Mike Callahans, but none of them are retiring as the CEO of OCC. My apologies to Mike Cahill for the brain cramp induced error.

The FIA has an interview with the new CFTC Chairman, Timothy Massad. Check it out below.

Doug Ashburn and his wife Nancy have been spotted near the Eiffel Tower in Paris, or in front of an Eiffel Tower backdrop at J.C. Penny’s. They are headed to the SFOA/FIA/FIA Europe Bürgenstock conference, which starts today.

FOW is reporting that Steve Chivers has left UBS and has joined Jefferies. The story is below.

The CTA Expo is in Chicago this week. Jim Kharouf and I are headed over there today.


CNBC and ‘Futures Now’ contributor Rich Ilczyszyn dies at 46
Maxwell Meyers – CNBC
CNBC’s “Futures Now” team is very sad to report that Rich Ilczyszyn died Saturday at age 46. Rich was a valued contributor to “Futures Now,” where his wit, energy and intelligence made him an integral part of the team. More importantly, Rich was a truly kind and decent individual, and a family man through and through

***** Forty-six is way too young to go.


The New Chairman: An Interview with the CFTC’s Tim Massad
Will Acworth – FIA
Can you give us a sense of the trail of events that led you to this job?
MASSAD: I spent 25 years in private practice. When the financial crisis happened, I volunteered to help the Congressional Oversight Committee.

***** Good get by Will Acworth of the FIA.


CFTC Chairman Timothy Massad to deliver Keynote Address at SEFCON V
The Wholesale Markets Brokers’ Association, Americas WMBAA, announced today that Timothy Massad, Chairman of the U.S. Commodity Futures Trading Commission, will deliver the keynote address at SEFCON V, the Association’s fifth annual conference taking place on Wednesday, November 12, 2014, at the Grand Hyatt Hotel in New York City.

***** Good get by the WMBAA and their SEFCON V conference.


Bair, Duffy on Financial Regulations: Video
Sheila Bair, senior adviser at Pew Charitable Trusts and former chair of the Federal Deposit Insurance Corp., and Terrence Duffy, executive chairman of CME Group Inc., talk about financial regulations. Bloomberg’s Robert Dieterich moderates the discussion at the Bloomberg Markets Most Influential Summit in New York.

***** No wonder no one is in town.


For Some High-Speed Firms, It’s No Longer Just About Speed
Geoffrey Rogow – MoneyBeat – WSJ
In the past year, regulators and governments have made it harder and harder for high-frequency traders to buy data before the average investor. As a result, the releasing of data from places like the Institute for Supply Management, Thomson Reuters, PR Newswire and others have all been changed to ensure information goes to all parties at the same time. But those changes haven’t meant that the speed game is over. Now, it’s about making trades that are both fast…and smart, even if it means slowing down the trade slightly.

***** I recently had a proprietary trading owner tell me just this. He said “GETCO was not just about speed, it was about strategy” and strategy still works.


ISE Gemini Reaches Daily Volume Milestone
ISE Gemini announced that it surpassed 900,000 contracts for the first time (actual: 948,609 contracts) in a single day on Friday, September 19. Month-to-date, ISE Gemini has an average daily volume (ADV) of 687,292 and an overall equity options market share of over 4.4 percent (excluding dividend trades), both new monthly records.

***** I think Gary Katz should drop a bucket of cold water on his head every time Gemini reaches a new volume record, or he gets the urge to sue the CBOE.


Jefferies hires UBS’s Chivers – sources
Luke Jeffs – Futures & Options World
Jefferies, the US bank, is set to hire Steve Chivers, the former head of futures and options electronic trading at UBS, marking the latest hire by Jefferies and the latest departure from UBS, according to three sources.

***** There goes another UBS contact.


SEBI Approves New Name For MCX-SX
MCX Stock Exchange (MCX-SX) has received approval from Capital Market Regulator SEBI vide their letter dated 17th September 2014 to change its name and operate under the new iconic name, ‘Metropolitan Stock Exchange of India Ltd’, abbreviated as ‘mSXI’.

***** I like International Metropolitan Stock Exchange of India Ltd or ImSXI better.


OptionsCity Webinar: Exploring the Latest Volatility Advancements in Metro 5.2
Wednesday, September 24, 2014 – 2:00pm CST
Ever wanted to have more flexibility when calibrating a volatility curve to match market prices? Traders can now leverage improved pricing and valuation in the volatility advancements in Metro 5.2. Advancements include the ability to assign the center of a floating volatility curve in terms of the point type. Instead of floating a curve along the current underlying, each curve can follow the 50 delta strike, or even a 1/2 standard deviation shift above the spot price. Join us in this session as Quantitative Analyst, David Hrencecin, provides outlines the problems these volatility advancements solve for traders, as well as touching upon the future direction of volatility modeling at OptionsCity.
Register at


John Ruth, CEO – ABN AMRO Clearing Chicago – Career Builder

“If you want to get noticed in your organization, be someone who can solve problems.”

It’s your first day at a new company. You have yet to learn the ropes and you need to get yourself acquainted with the basics. You’re not ready to make an immediate impact on your organization, right? Wrong. John Ruth, CEO of ABN AMRO Clearing Chicago, believes that everyone in an organization – from interns and new hires to the company’s established veterans – can make a positive impact. Ruth says that problem solvers are extremely important assets for an organization. Those are the people who get noticed quickly and can unlock more possibilities in their career advancement. Along with managing career development, Ruth discusses the importance of adapting to change and what it can mean for not just an individual, but an entire organization.

Watch the video »



MarketsWiki Page of the Day
Michael E. Cahill

MarketsWiki Recent Updates


Michael McClain; Michael E. Cahill; Thomas Burrell; Robert Newhouse

Companies, Organizations and Groups

OCC; Victor Technologies


53,414,053 pages viewed, 8,044 articles, 186,100 edits
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Lead Stories

Liquidnet Cuts About 6% of Staff Citing Struggling U.S. Market
Sam Mamudi and Matthew Leising – Bloomberg
Liquidnet Holdings Inc., which runs a trading platform where large investors can buy and sell stocks, is cutting staff amid poor performance at its U.S. division. The reductions amount to less than 6 percent of its employees, according to a statement from Liquidnet.

ConvergEx Develops New Order Routing Strategy to IEX & Its Own Dark Liquidity Algo
Ivy Schmerken – Wall Street & Technology
The agency broker is giving the buy side a choice of routing a percentage of an order to IEX while designating a percentage to go through ConvergEx’s Darkest, an algo connected to 20+ unlit venues.

BlackRock Urges Overhaul of Corporate Bond Trading
Nathaniel Popper – Dealbook – NY Times
The giant asset manager BlackRock is initiating an aggressive call for the overhaul of a bond market that sits at the center of the United States financial industry and many retirement portfolios.

US corporate bond traders go electronic
Tracy Alloway and Michael Mackenzie in New York – Financial Times
The last bastion of wild west trading on Wall Street is coming under increasing scrutiny from regulators and investors. Immortalised 35 years ago in Liar’s Poker – Michael Lewis’s account of his time as a bond salesman in the 1980s – nothing much has changed when it comes to buying and selling debt issued by America’s biggest companies.

Shrinking Bond Desks Taken by Journeymen as Masters Fade
Nabila Ahmed – Bloomberg
It was once the profession that inspired Sherman McCoy in the novel “The Bonfire of the Vanities.” In the 1980s, the excitement in the trading room, with hundreds of people talking on the phone, was palpable, like a sporting event, said Kerry Stein, head of credit trading at Lloyds Securities Inc. Those days are gone.

CME’s Duffy: Investor Sentiment, Markets, Regulations: Video
Terrence Duffy, executive chairman of CME Group Inc., talks about investor sentiment, financial markets, and industry regulations. He speaks with Stephanie Ruhle on Bloomberg Television’s “Market Makers.”

Calpers’ exit has sent hedge fund managers a public health warning
Miles Johnson – Financial Times
At a recent dinner party a hedge fund manager told one of his favourite stories. “I was watching a stand-up comedy show,” the manager began. “Out of nowhere the comic stops next to me and asks, ‘Sir, what do you do for a living?’. The manager started to panic, fearing telling the truth would result in an hour of public ridicule. “So I just blurted out the first thing that came into my head: ‘I’m a doctor'”.

The glaringly obvious guide to the next crash
James Mackintosh – Financial Times
Hindsight is a wonderful thing, especially when it comes to explaining market crashes. Six times in the past 50 years US equities dropped more than 30 per cent in 12 months. After most of them investors looked back at glaring warning signs and were baffled that they missed them. If the S&P 500 were to plunge from 2,000 to 1,400 in the next year, what screaming sell signals would future generations gaze at in the history books and wonder at our ability to ignore the obvious?


Pursuit of Individuals in Corporate Misconduct Still Arduous
Peter J. Henning – Dealbook – NY Times
The Justice Department went on a bit of a charm offensive last week to emphasize to the public that prosecutions for corporate misconduct should not end with just a settlement with the company, which these days usually means paying a hefty fine that causes its stock price to rise.

Industry questions value and cost of retirement reforms
Joe McGrath – Financial News
Fund managers and trade bodies responding to the Financial Conduct Authority’s consultation on retirement reforms have called for proposals to go further than one-off guidance and for more assessment on how guidance will be funded.

N.Y. financial regulator says to focus on cyber security
Luciana Lopez and Karen Freifeld – Reuters
New York’s financial regulator said on Monday his agency will focus on cyber security over the next year, saying the possibility of a systemic attack to the financial system is one thing that keeps him awake at night.

BoE’s Bailey wants better global coordination over bank fines
Regulators from across the world should coordinate better how they levy fines on banks for misconduct to avoid making it harder to build a resilient banking system, Bank of England Deputy Governor Andrew Bailey said on Tuesday.

SEC Announces Arrival of New Administrative Law Judge
The Securities and Exchange Commission today announced that Jason S. Patil begins work at the agency this week as an Administrative Law Judge.

Making the case for a banker’s ‘duty of care’
Paige Long –
As regulators propose new rules for prosecuting individuals as well as companies, the concept of legislating a banker’s ‘duty of care’ has been raised again

Exchanges & Trading Facilities

Exchange mergers boost tech costs – vendor
Joe Parsons – Futures & Options World
Exchange consolidation is hiking the cost of technology for clients, a tech vendor has warned. “It is significant draw on revenues and it’s not one of those tasks that is optional. To carry on trading these contracts you would have to give priority to this work over other projects,” Gerry Turner, managing director, Object Trading told FOW.

BMV Group To Neutralize All Its Corporate Events In 2014
The Mexican Stock Exchange’s (“BMV”) Sustainability Strategy Includes The Neutralization Of Greenhouse Gases Produced By Its Corporate Events – The MEXICO2 Platform Grants The “Neutral Carbon” Stamp To Environmentally-Responsible Companies That Wish To Compensate The Emissions Produced By Their Corporate Events And Flights, Energy Footprints, Among Others

Taiwan Stock Exchange Renews MOU With Warsaw Stock Exchange
Globalization has seen capital markets around the world face unprecedented levels of competition. In order to strengthen their competitiveness, stock exchanges are actively seeking international strategic alliances with their peers for product development and market expansion, which benefit all parties.

SIX Exchange Regulation: Delisting Loeb Holding AG, Berne

NZX Employee Share Plan – Team And Results

Hedge Funds & Managed Futures

Ex-Deutsche Bank’s Lehr Said to Start New York Hedge Fund
Rodrigo Orihuela – Bloomberg
Hal Lehr, a former Deutsche Bank AG (DBK) and Soros Fund Management LLC trader, received backing from JPMorgan Chase & Co. (JPM)’s asset management unit to start a New York hedge-fund firm, a person with knowledge of the matter said.

Barclays Hires Former Citigroup Banker to Head Wealth Management
Chad Bray – Dealbook – NY Times
The British lender Barclays said on Monday that it had hired a former banker at Citigroup to head its wealth management business.

MOVES-Blackstone hires Arteaga, Fernandez from Rothschild
Blackstone Group LP said it appointed Borja Arteaga as senior managing director to head its restructuring and M&A advisory in the Iberian Peninsula.

Banks & Brokers

Barclays will ‘robustly’ defend dark pool allegations: CEO
Michelle Fox – CNBC
Barclays Group Chief Executive Antony Jenkins told CNBC Monday the British bank has a strong defense to allegations it used its private trading system, a so-called dark pool, to benefit high-speed traders. Jenkins said the matter was investigated fully by “internal and external resources.”

Deutsche Bank Fires Sydney Currency Trader for Allegedly Hiding Losses
Justin Baer – WSJ
Deutsche Bank AG fired a currency trader at its Sydney office in August after the German lender uncovered that he allegedly hid losses.

Clearing & Settlement

LME Clear in talks with other exchanges – CEO
Luke Jeffs – Futures & Options World
LME Clear, the London-based clearing house that went live on Monday, is already in talks with other trading venues about the possibility of clearing on their behalf, according to chief executive Trevor Spanner.

SIX Securities Services And Euroclear Join Forces For Global Fund Services

Indexes & Products

Goldman Sachs files for active ETFs, joins Wall Street bank trend
Ashley Lau – Reuters
Goldman Sachs Group Inc has laid the groundwork to launch actively managed exchange-traded funds, becoming the latest Wall Street bank to set its sights on the fast-growing market.

Semi-Annual Changes To The NASDAQ OMX Clean Edge Smart Grid Infrastructure Index

Bucharest Stock Exchange: Launch Of BET Total Return Index


Yuanta Bank Connects to Fenics Gateway
FENICS, a leading provider of FX options software, announced today that Yuanta Bank, a leading Taiwanese commercial bank, has connected to FENICS Gateway and also extended its FENICS Professional license.

Mobile Hot, Cloud Not in Financial Services
Bryan Yurcan – Wall Street & Technology
A survey conducted by the Harvard Business Review in conjunction with Verizon looked at technology trends in various industries.

Surveillance analytics drive heralds new era of TCA
John Bakie – The Trade
Using the vast quantity of data collected for market surveillance could become a major source of information for informing trading decisions in the future.

Dion Debuts AlphaClick
James Rundle – WatersTechnology
Dion Global Solutions has announced the launch of AlphaClick, a portfolio analytics tool aimed at venture capital and private equity firms.

Exceed, Nasdaq Ally for Structured Investment Indexes, Data Distribution
Max Bowie – WatersTechnology
New York-based boutique financial services firm Exceed Investments is launching a new family of indexes, dubbed the Nasdaq Exceed Structured Indexes, in partnership with Nasdaq OMX. The new indexes are designed deliver the predictability of structured investing strategies but with greater transparency, officials say.

Valemobi Enriches VALEBROKER Trading Platform with Numerix’s Advanced Analytical Framework for Individual Asset Class Pricing and Portfolio-level Risk Analysis
Numerix, the leading provider of cross-asset analytics for derivatives valuations and risk management, and Valemobi a sophisticated trading platform for multi-asset brokerage, today announce a new partnership agreement.


SEC Announces Largest-Ever Whistleblower Award
The Securities and Exchange Commission today announced an expected award of more than $30 million to a whistleblower who provided key original information that led to a successful SEC enforcement action.

SEC Charges New York-Based Private Equity Fund Adviser With Misallocation Of Portfolio Company Expenses
The Securities and Exchange Commission today charged a New York-based investment advisory firm with breaching its fiduciary duty to a pair of private equity funds by sharing expenses between a company in one’s portfolio and a company in the other’s portfolio in a manner that improperly benefited one fund over the other.

Wells Fargo Advisors Admits Failing to Maintain Controls and Producing Altered Document, Agrees to Pay $5 Million Penalty
The Securities and Exchange Commission today charged Wells Fargo Advisors LLC with failing to maintain adequate controls to prevent one of its employees from insider trading based on a customer’s nonpublic information. The SEC also charged Wells Fargo for unreasonably delaying its production of documents during the SEC’s investigation and providing an altered internal document related to a compliance review of the broker’s trading.

Barclays hit with record GBP38m FCA fine
Nick Paler – Investment Week
Barclays has been hit with a GBP38m fine for failing to adequately protect clients’ funds, the Financial Conduct Authority has confirmed.

ASIC: Etrade Australia Securities Limited Pays $55,000 Infringement Notice Penalty


SZSE indexes big data
Simon Osborne – The Trade
The Shenzhen Stock Exchange (SZSE) has launched a series of ‘Big Data’ indices. The indices have been named the CNI Big Data 100 Index (i100) and CNI Big Data 300 Index (i300).

Chi-X Japan launches new VWAP cross
Simon Osborne – The Trade
Chi-X Japan has announced that it launched a new product, Chi-Match VWAP Cross, on 1 September.

Singapore Exchange Upgrades Reporting
Michael Shashoua – WatersTechnology
The exchange, working with a market practice group, is requiring completion of structured data fields to better support corporate actions reporting

China banks poised to relax mortgage rates, say state media
Gabriel Wildau in Shanghai – Financial Times
China’s biggest banks plan to lower interest rates on home mortgages, state media reported on Tuesday, highlighting Beijing’s concerns about the flagging property market and its impact on the broader economy.

Bank of China to Sell High-Yield Bond Fund in Europe
Juliet Samuel – WSJ
One of China’s state-owned banks has struck a deal with Citigroup C -0.82% to market its first fund to pension and retail investors in Europe.

SGX reports 1Q results on 21 October

Frontier Markets

Brics bank: requiem for a dream
Sid Verma – Euromoney Magazine
Incensed by their failure to reform, Brics policymakers have established a flawed rival to the World Bank and IMF. Rhetoric aside, the west dismisses emerging-market dissent over the broken financial architecture at its peril.

China banking: Cinda – on the ball or to the wall?
Elliot Wilson – Euromoney Magazine
Asset management company Cinda is a stark example of the implausible nature of China’s financial system. It has transformed its business model from an NPL warehouse to what some call a giant shadow bank. With more AMCs in the pipeline, analysts are beginning to question if China understands the risks it is piling up.

Argentina Wants BNY Mellon Out as Trustee
Saabira Chaudhuri – WSJ
Argentina has asked Bank of New York Mellon to resign as its trustee, the latest salvo in what has turned into a protracted headache for the trust bank. In an advertisement published Monday in The Washington Post, Argentina said it has sent BNY Mellon a letter formally requesting the bank to immediately hand in its resignation because it is no longer eligible to serve as Argentina’s trustee.

ADX Partakes In Arqaam Capital Investors Conference 2014

Palestine Exchange On FTSE Frontier Market Watch List

Press Release By The Central Bank Of Jordan Regarding The Arab Bank

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