How Now and What’s Next for Retail Forex?
Doug Ashburn – JLN
As the self-proclaimed regulatory expert at John Lothian & Co., with my first three years here spent building our regulatory database MarketsReformWiki, I am generally the go-to person on stories involving rule changes. But when I was asked about the June 1 letter from Phillip Capital CEO Lynette Lim informing customers that the firm would be no longer be offering retail forex, due to a recent ruling by the Securities and Exchange Commission, the conversation went something like this:
John: “So, what is this SEC ruling all about, and is there a story here?”
Doug: “Uhh…uuh…I don’t know.”
So, how did I miss this? Simple – there was no press release and it was not a rule change per se but rather a notice posted on a Friday afternoon, saying that a previous ruling, which allowed certain registrants to offer retail forex, but with a sunset provision of July 31, 2016, would not be renewed. The sun will officially set.
First, a little historical context. In 2010, the CFTC approved its final rules regarding off-exchange retail foreign exchange transactions. Although the rulemaking pre-dated the Dodd-Frank Act, once the Act was signed in July 2010, the commission’s forex rules, along with the forex rules of other regulatory authorities, became a part of Dodd-Frank.
Read the rest of the column at JohnLothianNews.com HERE
An Advocate for the Listed U.S. Equities Options Industry
By Craig Donohue, OCC Executive Chairman
As the world’s largest equity derivatives clearing organization and the foundation for secure markets, we at OCC believe strongly in our purpose of ensuring confidence in the financial markets and the broader economy.
An important part of our values is serving market participants and the greater public interest in our role as an advocate for the listed U. S. equities options industry. The legislative, regulatory and policy initiatives impacting OCC, our clearing members and their customers reflect the global and interconnected nature of these markets. These external factors can sometimes disrupt the balance that we as independent risk managers strive to maintain. For this reason, we take seriously our role in educating policy makers about our markets and to advocate for legislation and regulation that maintains the efficiency and competitiveness of our markets.
Read the rest of the post HERE
CME Group Granted License to Clear Interest Rate Swaps in Japan
CME Group, the world’s leading and most diverse derivatives marketplace, announced that Chicago Mercantile Exchange Inc. (CME) has been formally granted the status of Foreign Clearing Organisation (FCO) by the Prime Minister of Japan on 1 June 2016.
***** Look for the seaweed OTC contract to be the first cleared.
Top Washington Strategist Launches New Consulting Firm
One of Washington’s top policy and political strategists today announced the formation and launch of a new public affairs shop named Stump Strategic. The firm seeks to bring business and government together to achieve commonsense solutions through advocacy, education, and coalition development. Founded by Dawn Stump, a Capitol Hill veteran with extensive experience working in government relations on behalf of global exchanges and trade associations, the firm will focus on issues relating to financial services.
***** Dawn Stump becomes an entrepreneur. She comes highly recommended.
Bursa Malaysia appoints Herder as director for its subsidiaries
The Star Online
Bursa Malaysia Bhd has appointed William Francis Herder as independent director to the board of its subsidiaries, Bursa Malaysia Derivatives Bhd and its clearing house, Bursa Malaysia Derivatives Clearing Bhd, effective June 2.
***DA: They buried the lead, which is that Bill Herder’s middle name is “Francis.”
How the Feds Pulled Off the Biggest Insider-Trading Investigation in U.S. History
By Patricia Hurtado & Michael Keller – Bloomberg
For more than seven years, the U.S. government has relentlessly prosecuted Wall Street traders who used inside information to rake in hundreds of millions of dollars in profits. Federal prosecutors in New York have racked up 91 convictions and collected almost $2 billion in fines. In the latest action on May 19, the government looked beyond Wall Street, accusing a legendary Las Vegas gambler of profiting from insider tips.
***** Lesson learned: Don’t mess with the Feds.
It’s More Expensive to Throw a Bachelor Party Than a Bachelorette Party; One last hurrah with the boys is no longer just one night of debauchery.
Polly Mosendz – Bloomberg
If you want Lee Abbamonte, a travel blogger in New York, to plan your bachelor party, it will cost you $1,000. Actually, that’s just for a consultation. To get him to make the arrangements will cost $5,000. Well, technically, it will cost $5,000 or 10 percent of the total cost of the event, whichever is higher. This is because, as he sees it, the bachelor party is “like a honeymoon for you and your buddies.” And as with any honeymoon, says Abbamonte, 37, who caters mostly to Wall Streeters, the costs add up: “It can be $1,000 to $10,000 per person.”
***** Who needs some dude to plan your bachelor party? That is what the best man is for.
Here’s What the Government Wants to Do to Your Bacon; The FDA proposes guidelines for cuts to salt levels in foods.
John Tozzi – Bloomberg
About 90 percent of Americans eat more salt than health authorities recommend. It’s difficult not to: So much sodium is baked into packaged food and restaurant meals that even people who never pick up the salt shaker can easily exceed the daily target of 2,300 milligrams.
***** You are going to have to get your salt from something other than bacon soon.
Wednesday’s Top Three
The runaway winner in yesterday’s click race was Deutsche Boerse which, according to CEO Carsten Kengeter, will “seek its destiny outside Europe” if its LSEG bid fails. In second place was the letter from Phillip Capital CEO Lynette Lim to the firm’s customers, informing them that, due to a change by the SEC, the firm would no longer offer retail forex to customers. (See today’s top commentary). In third place, from The Trade News, was CCPs should consider how they interact with the buy-side, in which CME’s Tina Hasenpusch says more discussions are needed to increase buy-side involvement in clearing.
|WFE Monthly FOCUS E-Zine – May 2016|
The World Federation of Exchanges represents 64 regulated exchanges across the world, and acts on behalf of a total of 99 organizations including affiliate members and clearinghouses.
Welcome to the May edition of FOCUS.
This edition is devoted to the annual IOSCO conference and the themes that gripped delegates. Held every year since 1974, the IOSCO annual conference gathers the world’s securities regulators to discuss the issues of the day – comparable in some ways to WFE’s General Assembly & Annual Meeting where the world’s exchanges & CCPs meet. It’s one of the most important events of the year for the global securities market industry and particularly significant for WFE which advocates on behalf of its members to the three global regulatory organizations: IOSCO, BCBS and the Financial Stability Board.
LSE, Deutsche Börse Give More Details on Merger; Shareholders to vote on deal after U.K. referendum on EU membership
By EYK HENNING – WSJ
Deutsche Börse AG and London Stock Exchange Group PLC said Wednesday that investors in both companies will decide on a planned merger after the U.K.’s June 23 vote on whether to stay in the European Union.
Deutsche Boerse exec: London Stock Exchange merger is “the last chance for Europe”
William Turvill – City AM
A senior Deutsche Boerse exec has described the company’s impending merger with the London Stock Exchange as “the last chance for Europe”, after the two giants revealed details of their proposed £21bn tie-up.
Inside Vitol: How the World’s Largest Oil Trader Makes Billions
Javier Blas, Andy Hoffman – Bloomberg
In its 50-year history, the publicity-shy energy company hasn’t seen an annual loss. Now business is becoming more competitive than ever.
It wasn’t a normal business trip, even for Ian Taylor. Over an almost 40-year career in oil, the Oxford-educated Brit had set down in plenty of hot spots, from Tehran to Caracas, Baghdad to Lagos. Yet this journey—destination Benghazi, Libya, in the midst of a civil war—was different.
Karen the Supertrader’s Winning Strategy Relied on Fraud
Bradley Keoun – The Street
SEC Alleges; Self-taught options trader Karen Bruton earned so much so quickly that some skeptics doubted her. In reality, the SEC says, she improperly concealed more than $50 million of losses.
It wasn’t innovative strategy behind Karen the SuperTrader’s consistent returns after all, the U.S. Securities and Exchange Commission says, but a much more tried-and-true technique: fraud.
BRIEF-Deutsche Boerse CEO sees continued progress in talks with regulators
London Stock Exchange Group: Expect to make “continued” good progress on discussions with regulators in coming months- Deutsche Boerse CEO Carsten Kengeter
Ex-Barclays employees tell jury of ‘humiliation’ and pressure; Traders take stand during Libor manipulation trial
by: Jane Croft – FT
Five former Barclays employees on trial for allegedly conspiring to rig interest rates have taken the stand in their own defence, with several telling the jury of the stress and pressure they felt while working at the UK bank.
How experts track global cyber criminals; Identifying culprits is fraught with error, as recent attacks on banks show
by: David J Lynch in Washington – FT
If President Barack Obama was correct when he blamed the 2014 Sony Pictures cyber attack on the North Korean government, then Pyongyang was also likely responsible for the recent digital assaults on banks using the Swift network.
What Happens When Bond Investors Act Like Stock Jockeys; Bonds can be risky in different ways and investors shouldn’t underestimate interest-rate risk
By RICHARD BARLEY – WSJ
Pick your poison. Confronted with ultralow, short-term interest rates, bond investors have two main ways to try to boost returns. They can either buy longer-maturity bonds that are more exposed to interest-rate risk, or they can buy lower-rated bonds that are more exposed to credit risk.
Business Is Bad? Blame the Millennials
Luke Kawa – Bloomberg
“Less than 50 percent of their time is spent on value-creating business activities.”
Everything’s bigger in Texas, including hyperbole over the challenges of managing millennials.
Rich Defendants’ Request to Judges: Lock Me Up in a Gilded Cage
By BENJAMIN WEISER – NY Times
When Reza Zarrab, a gold trader based in Turkey, was arrested on a recent trip to the United States and sent to New York to face federal charges, his lawyer tried to keep him out of prison by tapping into Mr. Zarrab’s considerable wealth.
Tom Watson: ban hedge funds from cashing in on EU referendum; The deputy Labour leader has urged David Cameron to take action against those speculating on sterling before June result
Rowena Mason Political correspondent – The Guardian
David Cameron should ban hedge funds from trying to cash in on the EU referendum by commissioning private exit polls to speculate on sterling before the official result, Labour’s deputy leader has said.
AIG must face Pimco lawsuit over financial crisis losses
BY JONATHAN STEMPEL – Reuters
American International Group Inc (AIG.N) failed to persuade a California judge to dismiss a lawsuit by Pacific Investment Management Co that accuses AIG of lying about its subprime mortgage exposure prior to the 2008 financial crisis.
JPMorgan sheds light on currency trade practice; Guidelines released on rejected ‘last look’ trades comes amid scrutiny by regulators
by: Katie Martin
JPMorgan has released new guidelines to provide clarity on why it rejects some currency trades in the latest effort by the world’s biggest banks to improve a public image muddied by scandals.
More Than 50 Computer Breaches Reportedly at Fed From 2011 to 2015
News report says central bank doesn’t disclose who was behind attacks, if funds were stolen or if sensitive information accessed
More than 50 breaches of computers used by the Federal Reserve Bank took place from 2011 to 2015, according to cybersecurity reports issued by the central bank, Reuters reported Wednesday on its website.
Congress Launches Inquiry Into N.Y. Fed Handling of Bank of Bangladesh Cyberheist; House panel probing N.Y. Fed’s role overseeing Swift payment network
By Kate Davidson – WSJ
A congressional panel is seeking more details related to the $101 million cyberheist from the Bangladeshi central bank’s account at the Federal Reserve Bank of New York earlier this year.
ESMA ASSESSES USEFULNESS OF DISTRIBUTED LEDGER TECHNOLOGIES
The European Securities and Markets Authority (ESMA) has issued today a Discussion Paper for public consultation on distributed ledger technology (DLT).
ESMA REMINDS FIRMS OF RESPONSIBILITIES WHEN SELLING BAIL-IN SECURITIES
The European Securities and Markets Authority (ESMA) has today published a Statement reminding banks and investment firms (‘firms’) of their responsibility to act in their clients’ best interests when selling bail-in-able financial instruments. New Banking Recovery and Resolution Directive (BRRD) rules in force since January 2016 mean firms are likely to issue a significant amount of potentially loss-bearing instruments to fulfil their obligations and ESMA is concerned investors – in particular retail investors – are unaware of the risks they may face when buying these instruments.
ESMA PUBLISHES UPDATED Q&A ON CFDS AND OTHER SPECULATIVE PRODUCTS
The European Securities and Markets Authority (ESMA) has published today an updated version of its question and answer document (Q&A) on the application of the Markets in Financial Instruments Directive (MiFID) to the marketing and sale of financial contracts for difference (CFDs) and other speculative products to retail clients (such as binary options and rolling spot forex).
CFTC Issues Two Entities Orders of Foreign Board of Trade Registration to Permit Trading By Direct Access from the U.S.
The U.S. Commodity Futures Trading Commission (CFTC) issued Orders of Registration to the following Foreign Boards of Trade (FBOT):
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros (BVMF), an FBOT located in São Paulo, Brazil; and
Cleartrade Exchange Pte. Limited (Cleartrade), an FBOT registered in Singapore with offices in Singapore and London.
SEC Adopts Amendment to Form 10-K Implementing FAST Act Provision
The Securities and Exchange Commission today announced it has approved an interim final rule that allows Form 10-K filers to provide a summary of business and financial information contained in the annual report. The rule implements a provision of the Fixing America’s Surface Transportation (FAST) Act.
CFTC Staff To Hold Roundtable On Certain Elements Of Regulation AT
The Commodity Futures Trading Commission’s (CFTC or Commission) Division of Market Oversight announced that staff will hold a public roundtable meeting, to discuss certain elements of the Commission’s notice of proposed rulemaking (NPRM) regarding Regulation Automated Trading (Regulation AT). The Regulation AT NPRM was published in the Federal Register (80 FR 78824) on December 17, 2015.
Fears that crowdfunding poses risks for small investors; SEC rule changes raise prospect of money being lost on bad deals
by: Mary Childs in New York – FT
Veteran investors in start-ups are questioning the long-delayed launch of the US market for equity crowdfunding, warning that small investors risk sinking their money into high-risk deals ignored by seasoned professionals.
ASIC taskforce uncovers issues at mid-tier financial firms
Daniel Palmer – THE AUSTRALIAN
The corporate watchdog has flagged issues with the behaviour of several mid-tier investment banking and stockbroking firms as it looks at measures to rebuild trust in the financial sector.
Who’s ready for MiFID II Best Execution? Event by The Trade and Deutsche Börse in Frankfurt.
More than 50 market participants accepted the invitation from The Trade and Deutsche Börse to discuss strategies, systems and working practices necessary to comply with MiFID II.
Joe McGrath, Managing Editor at The Trade, moderated an impressive list of speakers and dialogue partners, among them, representatives from Deutsche Börse Group.
SwapsInfo First Quarter 2016 Review
The ISDA SwapsInfo Quarterly Review provides analysis on interest rate derivatives (IRD) and credit default swap (CDS) index trading activity in the US. The research shows an increasing number of IRD and CDS index trades were cleared in the first quarter of 2016, and that electronic execution venues continued to play an important role in total trading activity. While this is true for both markets overall, bilateral CDS index trading volumes in particular saw a sharp decline in trade count and notional volume in the first quarter, while electronically traded volumes increased dramatically versus the first quarter of 2015.
SIFMA President and CEO Kenneth E. Bentsen, Jr. Remarks as Prepared for the 2016 SIFMA TCH Prudential Regulation Conference
FINRA’s Monthly Podcast – May 2016
Revisit the latest FINRA Notices, compliance resources, and news from May 2016.
Self-Regulatory Organization (SRO) Rulemaking and National Market System (NMS) Plans
Exchanges & Trading Facilities
Recommended all-share merger between LSEG plc and Deutsche Börse AG: Publication of Scheme Document, Exchange Offer Document and HoldCo Prospectus
Deutsche Börse AG
The Merger gives shareholders the opportunity to participate in value creation in a world-leading, market infrastructure group anchored in Europe
Turnover at Deutsche Börse’s cash markets at 103.8 billion euros in May
1 June 2016
Deutsche Börse Cash Market
Order book turnover on Xetra, Börse Frankfurt and Tradegate Exchange across all asset classes stood at EUR103.8 billion in May (May 2015: EUR125.6 billion).
Trading statistics May 2016; Eurex Exchange: ADV 5.9 million contracts / ISE: ADV 2.1 million contracts
In May 2016, the international derivatives markets of Eurex, part of Deutsche Börse Group, recorded an average daily volume of 8.0 million contracts (May 2015: 10.1 million). Of those, 5.9 million were Eurex Exchange contracts (May 2015: 7.7 million), and 2.1 million contracts (May 2015: 2.4 million) were traded at the New York based International Securities Exchange (ISE). The volume traded on the spot and derivatives power markets of the European Energy Exchange (EEX) amounted to 287.8 terawatt hours (TWh). Eurex Repo recorded in all markets in May 2016 an average outstanding volume of 142.6 billion euros.
CME Group Achieved Average Daily Volume of 14.9 Million Contracts per Day in May 2016, up 6 Percent from May 2015
Jun 2, 2016
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that May 2016 volume averaged 14.9 million contracts per day, up 6 percent from May 2015. CME Group May 2016 options volume averaged 2.8 million contracts per day, up 10 percent versus May 2015, with electronic options averaging 1.6 million contracts per day, up 13 percent over the same period last year. Total open interest at the end of May was 113 million contracts, up 23 percent from year-end 2015.
CBOE Holdings Reports May 2016 Trading Volume
Total Index Options ADV Up 8% from May 2015; VIX Futures ADV Up 31% from May 2015; SPX Options ADV Up 13% from May 2015
CBOE Holdings, Inc. (NASDAQ: CBOE) reported today that May average daily volume (ADV) for options contracts traded on Chicago Board Options Exchange® (CBOE®) and C2 Options Exchange (C2), and futures contracts traded on CBOE Futures Exchange (CFE®) was 4.3 million contracts, an increase of 2 percent from April 2016 and relatively unchanged from May 2015.
Bats Launches Liquidity Management Provider Program
Bats Global Markets, Inc. (Bats: BATS), the #1 U.S. market for the trading of exchange-traded products (“ETPs”), today launches the Liquidity Management Provider (“LMP”) Program on The Bats ETF Marketplace, further incentivizing liquidity providers trading ETPs on Bats.
TMX Group CEO Lou Eccleston To Present At The 2016 Sandler O’Neill Global Exchange And Brokerage Conference
Lou Eccleston, TMX Group CEO will present at the 2016 Sandler O’Neill Global Exchange and Brokerage Conference on June 8, 2016 in New York.
OneChicago Announces Trading Volume For May 2016 – May Volume Up 4% Year-Over-Year
OneChicago, LLC (OCX), a securities finance exchange, today announced its May 2016 volume of 1,043,097, an increase of 4% year-over-year. OneChicago is a CFTC and SEC regulated exchange offering Single Stock Futures (SSF), a Delta One product, on approximately 1,800 equities, including ADRs and ETFs.
TOM Liquidity Report April
Key figures SIX Swiss Exchange and SIX Structured Products Exchange: May 2016
A total of 21,045,833 transactions have been conducted on SIX Swiss Exchange and SIX Structured Products Exchange since the start of 2016. This marks a year-on-year decrease of 4.8%. There have been
20,165,056 trades in the Equities including Funds + ETPs segment, equating to a decline of 3.9%. There have been 168,730 (-24.8%) trades in the Bonds CHF segment.
New Moscow Exchange listing rules to come into effect on 7 June
Moscow Exchange will implement new listing rules effective as of 7 June 2016.
RPT-Two years after Qingdao scandal, LME bets on electronic tracking of metal
By Melanie Burton – Reuters
LMEshield gains some traction among banks, warehouses; Some traders worry about privacy of stocks; LME faces other hurdles of cost, jurisdiction; Could open way to use LMEshield in China
The London Metal Exchange is expanding its new electronic method of tracking metal in warehouses, as the system launched in April gains early traction among some western and Chinese banks, as well as warehousing and metals firms looking to cut risks.
SGX extends MTP review for 13 companies to September
Singapore Exchange (SGX) is giving 13 Mainboard companies affected by recent market volatility till 1 September 2016 before their 6-month volume-weighted average prices are reviewed under the Minimum Trading Price requirement. The extension means no company will be added to the watch-list due to MTP on 3 June 2016.
Presentation by HKEX Head of Markets Roger Lee at a Media Workshop on Closing Auction Session and Volatility Control Mechanism
Nasdaq Welcomes Additional Companies to the Nasdaq International Designation
Nasdaq, Inc. (Nasdaq:NDAQ) today announced that Nidec Corporation (OTC:NJDCY) (TYO:6594) and Clinuvel Pharmaceuticals Ltd. (OTC:CLVLY) (ASX:CUV) have joined the Nasdaq International Designation program. Through their membership, Nidec and Clinuvel will have access to Nasdaq’s investor relations services and unparalleled visibility assets to increase awareness with investors for their U.S.-traded Level 1 ADRs.
MGEX Reports Final May Volume Numbers
MGEX, a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), has concluded the month of May with a total volume of 118,181 and an electronic volume of 102,935.
Trump presidency? Bank of America CEO Moynihan says company will be fine
BY DAN FREED – Reuters
Bank of America Corp Chairman and Chief Executive Officer Brian Moynihan on Wednesday played down the impact on the bank if Donald Trump is elected as the next president of the United States.
Hedge Funds & Managed Futures
Central Banks Have Already Used a Better Tool Than Helicopter Money
Luke Kawa – Bloomberg
Former Federal Reserve Chair Ben Bernanke has worked to disabuse investors and economists of the notion that the Fed is nearly out of ammunition, pointing to a number of other tools at the central bank’s disposal.
Banks & Brokers
FlexTrade Partners with RSRCHXchange for MiFID II Compliance; FlexTrade has added a separate research function to its EMS
Aggelos Andreou – Waters Technology
Execution management system provider FlexTrade announced the integration of RSRCHXchange’s research database, which alerts traders to new research relevant to their activity. It will help clients comply with MiFID II’s unbundling requirements, set to be implemented by January 2018.
Here’s what investment banks have done to cut working hours
by Sarah Butcher – eFinancialCareers
Millennials are not like their predecessors. Yes, they want the high pay associated with junior investment banking jobs. No, they don’t want the crazy, exhausting, lifestyle of 80 hour+ working weeks.
Credit Suisse seeks to make Friday nights special for staff
By Freya Berry – Reuters
Credit Suisse has told its staff to leave work by 7pm on a Friday and not return until at least Saturday lunchtime, unless a big deal is in the works.
UBS tells bankers ‘take two’ in bid to get the balance right
BY ANJULI DAVIES AND PAMELA BARBAGLIA – Reuters
Investment bankers at UBS (UBSG.S) can now take at least two hours of “personal time” a week in the latest attempt by a bank to retain staff with a better work-life balance.
Bank Stress Tests: The Bar Keeps Getting Higher; As stress-test results loom, U.S. banks may face barriers to sharply increasing capital returns
By AARON BACK – WSJ
Banks are better positioned than ever to withstand the Federal Reserve’s annual stress tests. But investors still shouldn’t count on smooth passage.
Clearing & Settlement
iValue partners with DTCC for post-trade processing
iValue Consulting, a premier consulting company in the banking and finance sector with specific focus on capital markets, announced a partnership with The Depository Trust & Clearing Corporation (DTCC).
OCC Cleared Contract Volume Up Four Percent in May
Securities Lending Activity Up 52 Percent in May and 46 Percent Year-to-Date
OCC, the world’s largest equity derivatives clearing organization, announced that cleared contract volume in May reached 319,533,636 contracts, a four percent increase from the May 2015 volume of 308,639,215 contracts. OCC’s year-to-date average daily cleared contract volume is also up four percent from 2015 with 16,734,689 contracts.
Blockchain To Be “Lingua Franca” In Five Years
Peter Randall, chief executive of SETL, said blockchain will be the lingua france of finance in five years as the institutional payment and settlements infrastructure firm has launched its first commercial platform using distributed ledger technology.
Indexes & Products
China’s currency: Bending without breaking – Part 2 of 3
FTSE Russell Blog
In part one of our blog series on China’s currency we introduced the notion of the “impossible trinity”, an economic theory which says a country cannot simultaneously control its exchange rate and its monetary policy while allowing unrestricted cross-border capital flows. We then explored the first component, China’s approach to managing the Renminbi (CNY)/USD exchange rate. In this post we will see the “Trilemma” come further into view as we explore the second piece of the impossible trinity – China’s monetary policy.
Straits Times Index (STI) quarterly review
FTSE Russell announces that there will be no changes to the constituents of the Straits Times Index, following the June quarterly review.
China Stocks in Focus as Investors Prepare for MSCI Index Revamp
Peru may be out. Pakistan may be in. And China could have more clout than it’s ever had. Adding mainland-traded Chinese stocks to its global indexes is the most consequential move MSCI would make as part of its annual review, the results of which will be unveiled on June 14. Other potential changes include adding Pakistan stocks to the gauge, while excluding Peruvian equities.
China A-Share MSCI Inclusion Not a Done Deal
It is this time of the year again – I’m talking about the MSCI’s Annual Review (June 15) to decide whether to include China’s A-shares into its EM index. A-shares on May 30 jumped more than 3% on no obvious news, and continue to outperform yesterday. Market chatters point to a renewed excitement of a potential inclusion, which was fanned noticeably by Goldman Sachs raising the odds of a positive outcome to 70%, from a coin-flip previously.
Flourishing Factor ETFs
One of the more prominent themes dating back to 2015 in the world of exchange traded funds is the spate of multi-factor funds coming to market. Over the years, advisors and investors have become well-acquainted with ETFs that emphasize a single investment factor.
S&P Dow Jones Indices Market Attributes: Correlation & Dispersion Index Dashboard – New Features
We are pleased to introduce an updated dispersion and correlation dashboard, now including a broader set of indices as well as volatility statistics for major indices. This month’s report shows that May’s risk environment was less dramatic than might be deduced from the broader sentiment, while UK equities appear as-yet unconcerned over a “Brexit”. Note that that dispersion figures are now annualized, in contrast to previous reports.
Fed records show dozens of cybersecurity breaches
BY JASON LANGE AND DUSTIN VOLZ – Reuters
The U.S. Federal Reserve detected more than 50 cyber breaches between 2011 and 2015, with several incidents described internally as “espionage,” according to Fed records.
Itiviti Group AB: BMV Group Selects Next Generation FIX Engine, Catalys by Itiviti
Itiviti, a world-leading technology provider for the capital markets industry, today announced that Bolsa Mexicana de Valores (BMV Group), Mexico’s premier exchange for equities and derivatives, has chosen the next generation FIX Engine, Catalys by Itiviti, to support their transactional needs.
Banks That Understand Regulation and Fintech Are on Track for Success
This month marks nine years since investment bank Bear Stearns unexpectedly stepped in to provide support for funds that had invested in mortgage-backed securities.
SEC: Private Equity Fund Adviser Acted As Unregistered Broker
An SEC investigation found that Blackstreet Capital Management and Murry N. Gunty performed in-house brokerage services rather than using investment banks or broker-dealers to handle the acquisition and disposition of portfolio companies for a pair of private equity funds they advise. Blackstreet fully disclosed to its funds and their investors that it would provide brokerage services in exchange for a fee, yet the firm failed to comply with the registration requirements to operate as a broker-dealer.
Brokerage Firm Charged With Anti-Money Laundering Failures
The Securities and Exchange Commission today charged a Wall Street-based brokerage firm with failing to sufficiently evaluate or monitor customers’ trading for suspicious activity as required under the federal securities laws.
Environmental & Energy
Iran Resists Saudi Gesture for Unity as OPEC Fractures Reappear
Golnar Motevalli, Nayla Razzouk Javier Blas – Bloomberg
Saudi minister wants to show that OPEC isn’t dead, people say; No indication OPEC is seeking to change current production
Iran resisted overtures from OPEC’s largest producer Saudi Arabia to restore a production target scrapped at the group’s last meeting in December.
Fossil Fuels’ Unpopularity Leaves a Mark; Pipelines, export terminals are shelved across U.S., depriving areas of jobs and low-cost fuel
By AMY HARDER and ERIN AILWORTH – WSJ
Many major fossil-fuel projects across the U.S., from pipelines to export terminals, have been shelved or significantly delayed because of a confluence of new regulations, grass-roots opposition and a drop in energy prices.
Climate Scientists Debate Best Path Forward for Clean Energy
By Umair Irfan – ClimateWire
In a rented 15-passenger van barreling south on Interstate 55 out of Chicago in April, a group of environmental activists, a legendary scientist and a camera crew embarked on a quixotic rescue effort.
Renewable energy smashes global records in 2015, report shows
By Arthur Neslen – The Guardian
An upsurge in new wind, solar and hydro plants and capacity saw renewable energy smash global records last year, according to a report on new supply.
Korea to Open In-house Version of NASDAQ Private Market
by Korea Bizwire
A Korean version of the NASDAQ Private Market is expected to launch before the end of the year.
No need to panic, China’s banks are in pretty good shape; The country is not vulnerable to a financial crisis such as Asia in 1997, writes Nicholas Lardy
by: Nicholas Lardy – FT
The extraordinarily rapid rise of debt in China, particularly in the corporate sector, has given rise to fears that the country may be unable to avoid a banking crisis that would slow its growth and have substantial negative spillovers on the global economy. This fear is based on recent estimates by the International Monetary Fund and some investment banks that a substantial portion of new lending in recent years has gone to state-owned companies producing oversupplied goods where profits have turned negative.
Why Hong Kong must push green finance
Under the Paris climate accord concluded at the end of 2015, signatories agreed to work toward holding the increase in global average temperature to well below 2 degrees Centigrade above pre-industrial levels. To achieve the ambitious goal, countries across the world will need to make huge capital investments.
Singapore Crackdown Signals Cost Jump for Asia Private Banks
Singapore’s move to shut down scandal-plagued BSI Bank Ltd.’s operations in the country is reverberating through private banks facing surging costs to combat money laundering and protracted screening of new clients. Financial-industry costs to curb money laundering were already forecast by LexisNexis Risk Solutions to reach a record $1.5 billion in Asia this year. Catering to Asia’s swelling ranks of wealthy individuals is one of the industry’s fastest-growing sectors, and banks such as Credit Suisse Group AG are investing more in that business.
Index provider FTSE Russell to review Nigeria frontier status
FTSE Russell said on Wednesday it would assess the status of Nigerian equities in its “frontier” markets index during its annual review in September.
Brazil Is Unraveling. Here’s What’s Happening; The big mess in two minutes.
Julia Leite – Bloomberg
Between a corruption probe, an impeachment trial, and accusations of a coup, it’s been hard to keep up with Brazil this year.
Sebi, NCDEX tighten risk management mechanism; Move follows suspension of trading in castor seed contracts in January
Rajesh Bhayani – Business Standard
The Securities and Exchange Board of India (Sebi) and the National Commodity & Derivatives Exchange (NCDEX) seem to have learnt some lessons from the suspension of futures trading in castor seed on January 27 this year.
BIS Working Papers No 563; Who supplies liquidity, how and when?
by Bruno Biais, Fany Declerck and Sophie Moinas, Monetary and Economic Department – BIS
Jeff Bezos, Riding High, Defends Decision to Buy Washington Post
By KATIE BENNER and NICK WINGFIELD – NY Times
Jeff Bezos built Amazon into an e-commerce and computing powerhouse. Now his ambitions are more sprawling as he takes on ever larger civic and business challenges.
ADM appoints Pierre Duprat as president of EMEA
Archer Daniels Midland Co appointed Pierre Duprat as president of its business in Europe, Middle East and Africa and India, the U.S. agribusiness group said in a statement on Wednesday.