First Read

Boca Bits and Pieces
By John J. Lothian
Wednesday at the Futures Industry Association’s International Conference saw R.J. O’Brien & Associates honored for 100 years of service to the futures industry. Prior to a lunch-time speech by commentator Ted Koppel, a short video from John Lothian Productions for RJO, was shown talking about RJO’s 100 years (see the video at ).

Mr. Koppel liked the video, as did the audience.

The exchange leader panel was one of the best I can remember, with a great lineup of exchange CEOs and great balance. Bob Greifeld was there to represent Nasdaq OMX and Jeff Sprecher was there to represent his 17 exchanges.

Mr. Greifeld showed appreciation for monopolies by saying it was good to have one, but that all monopolies eventually go away. I think he was trying to deliver a message.

I ran into CFTC Commissioner Scott O’Malia who reported that former CFTC Chairman Gary Gensler’s mother had died yesterday. Condolences to Mr. Gensler and his family.

Trading Technologies unveiled their new NextTrade platform and a rebranding of the company. I think you will like both. You can check out a video about their new trading platform, from John Lothian Productions, at

We are going to sue Chuck Mackie for stealing our theme as he is calling his reports Boca Bits. We are willing to settle at Bar Luna tonight.

Is it me or does the new A in FIA look a lot like the logo from Google Drive?

The question Doug wanted to ask at the SEF panel to the nine members on the panel was, “Which of these SEFs won’t exist next year?”

Jim Kharouf and the video team interviewed Jeff Sprecher, Bob Greifeld, Garry Jones, Magnus Böcker and Alan Gandelman so far at Boca for our upcoming video series on Global Exchange Competition.

***JM: Glad to see you all are getting some real work done. If there are any Jeff Sprecher action figures left, pick one up for me, preferably the one with the blue tights and Scepter of Liquidity.


R.J. O’Brien & Associates Receives Award from FIA for 100 Years of Excellence as Firm Begins Centennial Celebration
R.J. O’Brien & Associates, the oldest and largest independent futures brokerage and clearing firm in the United States, yesterday kicked off its centennial celebration with an award from the FIA in honor of the Chicago-based firm’s “100 years of excellence”.

***JM: Neat video – worth a few minutes to watch (and I’d say that even if it wasn’t a JLN video). Also, congrats, RJO! If I can make it another half-century, I’ll try out having a “century of excellence” thing, too; but I think you’ll get more folks to come by for cake…


OCC Announces Board Appointments And Nominations, Adopts Governance Enhancements
OCC announced today the appointment of new Board Officers and Board committee chairs for 2014


CBOE plans nearly non-stop VIX futures trading this year -CEO
CBOE Holdings Inc, operator of the largest options exchange by trading volume, will implement nearly non-stop trading for futures on the its Volatility Index by the end of the year to capture more Asian trading, its chief executive said on Wednesday.


Worldwide Equity Pricing Available through Barchart OnDemand, Inc., a leading provider of market data and information, today announced availability of worldwide equity market data through Barchart OnDemand.


From Our Man At The 39th Annual International Futures Industry Conference. Tom Groenfeldt: SGX — A Year Of Investment Preparing For Years Of Growth
Mondo Visione
For SGX, 2013 was the year of infrastructure, said Magnus Böcker, CEO of the Singapore Exchange. Speaking at the FIA conference in Boca Raton, Florida he said the exchange had done very well in an IMF assessment and has invested in settlement and clearing.


Regulators Size Up Wall Street, With Worry
Money laundering, market rigging, tax dodging, selling faulty financial products, trampling homeowner rights and rampant risk-taking — these are some of the sins that big banks have committed in recent years.

***JM: First question for me is, “Is this a NEW problem, or is this the latest generation discovering an eternal, thorny problem that has so far never been solved?”



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Lead Stories

Monopoly Talk Riles Futures Market CEOs Amid Nasdaq’s Critique
Matthew Leising – Bloomberg
Do futures markets run monopolies? Depends on which chief executive officer you ask. At an industry conference yesterday, the CEOs of Nasdaq OMX Group Inc. and CME Group Inc. (CME) squared off in a debate over whether the business models of the dominant futures exchanges — where everything from bets on interest rates to oil, wheat and hogs trade — are aligned with customers’ best interests.

US energy futures may be forced out of UK CCPs
Tom Osborn –
Ice Clear Europe and LCH.Clearnet may not be able to offer clearing of US futures contracts in the UK after European clearing rules take effect, lobbyists are warning. The incoming regime requires a choice of segregation models that contradicts US rules

SEC Proposes Rules for Systemically Important Clearinghouses
Dave Michaels – Bloomberg
Clearinghouses guaranteeing trades in part of the $693 trillion swaps market would have to meet new standards to guard against defaults and failure under rules proposed by the U.S. Securities and Exchange Commission.

For S.E.C., a Much-Needed Win
Wall Street’s top regulator has taken a number of hard knocks in the courtroom. Now a federal judge has handed the regulator, the Securities and Exchange Commission, a pat on the back that may embolden it to take more cases to trial.

London lawyer named to lead FX probe at Bank of England
A top London lawyer who investigated phone hacking at News Corp’s British newspapers will lead a probe into the role of Bank of England officials in the possible manipulation of foreign exchange rates.

Fed Looked at Currency Trading in 2012, Didn’t Act
The Federal Reserve examined a key foreign-exchange benchmark months before global regulators sounded the alarm about potential manipulation, but officials took no public action.

Singapore puts Bitcoin dealers under the microscope
Paul J Davies in Hong Kong –
Bitcoin exchanges in Singapore will have to identify their customers and report suspicious transactions to regulators after the city-state said all dealers in virtual currencies will be subject to money laundering laws and other rules.

Hedge fund managers face up to ‘Truman Show’ markets
Miles Johnson –
In the Truman Show, the late nineties Hollywood film, the eponymous character lives a seemingly charmed world, snuggled comfortably into an American suburbia of white picket fences and crisply cut lawns. But gradually Truman starts to notice something is not quite right.

Twitter is the New CNN
Joshua M Brown | The Reformed Broker
As Operation Desert Shield became Operation Desert Storm in 1991, the world tuned in to the action on CNN – they turned the channel on and left it on until the war was won. Twitter’s filled that role now, fairly completely.

***JM: With, y’know, the noted difference that back in 1991, CNN’s coverage didn’t include two or three of their journalists making up completely fake stuff because they found it funny.


SEC Proposes Rules for Systemically Important and Security-Based Swap Clearing Agencies
The Securities and Exchange Commission voted today to propose new rules to enhance the oversight of clearing agencies that are deemed to be systemically important or that are involved in complex transactions, such as security-based swaps.

British Regulator Adds Industry Veteran to Supervise Investment Banks
The Financial Conduct Authority of Britain is turning to another industry veteran as it looks to bolster its expertise in its supervision division.

Regulatory Developments and the Changing Market Structure
Speech by David Lawton, Director of Markets at the FCA, at the American Bar Association Capital Markets Conference, Law Society, London, Thursday 27 February 2014.

Statement On The Proposal Of Rules Related To Registered Clearing Agencies, SEC Commissioner Kara M. Stein, Washington, D.C., March 12, 2014

Statement At SEC Open Meeting – Commissioner Daniel M. Gallagher, Washington, D.C., March 12, 2014

Statement At Open Meeting Regarding Standards For Covered Clearing Agencies, SEC Commissioner Michael S. Piwowar, Open Meeting, Washington, D.C. March 12, 2014

Enhancing The Stability And Safety Of Clearing Agencies – SEC Commissioner Luis A. Aguilar, SEC Open Meeting, Washington, D.C

Exchanges & Trading Facilities

TMX Group to Open Singapore Office
TMX Group today announced plans to open an office in Singapore, subject to regulatory approval. The new office, scheduled to open in 2014, will focus initially on establishing new business relationships and exploring new opportunities for Toronto Stock Exchange, TSX Venture Exchange and Montreal Exchange in the Asia-Pacific region.

Vienna Stock Exchange Gets Off To A Strong Start In 2014

Mock Trading Session – BM&FBOVESPA PUMA Trading System

NYSE to Suspend Trading in Accretive Health, Inc. and Commence Delisting Proceedings

NASDAQ OMX Nordic Welcomes ISS To List On Its Main Market

Hedge Funds & Managed Futures

Ex-Deutsche Bank consumer analysts launch fund
Giles Turner – Financial News
Two well respected former Deutsche Bank analysts, focusing on the consumer sector, are set to launch a new fund.

Bridges ventures into the community
Becky Pritchard – Financial News
The day job has changed a lot over the past 12 years for Michele Giddens, the co-founder of Bridges Ventures, an investment firm that marries making profits with getting positive outcomes for poorer parts of the UK.

Senior private equity women lose ground in Europe
Alec Macfarlane – Financial News
The proportion of women in top roles in European private equity has declined over the past year, according to data provider Preqin, but industry figures say positive steps are being taken to increase the number of women in senior positions.

Hedge fund directors lack credibility, says survey
Margie Lindsay –
Hedge fund directors have come in for criticism from investors and operational due diligence officials for a lack of scrutiny of the funds they represent. Many say directorships should be capped at 15

Risk managers should learn from the mistakes of others
Vincent Kaminski –
Doing enough detective work to discover whether companies are really rotten to the core may be challenging for busy risk managers. But bad eggs usually come with early warning signs, which are easier to spot

A ‘New Normal’, Characterised By Cost Awareness And Reduced Revenue Pools, Emerges In Equity Markets
A new piece of research from GreySpark Partners, a London-based capital markets consultancy, examines the state of trading in equity markets. The report, Trends in Equities Trading 2014, which was published today, assesses the ‘new normal’ that is emerging in equity markets as trading volumes grow and revenue projections become more optimistic.

The FTC has opened an investigation into Herbalife [Update]
Dan McCrum | FT Alphaville
The Federal Trade Commission has opened a formal investigation into Herbalife, the multi-level marketing company that hedge fund manager Bill Ackman has called a pyramid scheme, according to people familiar with the situation.

Banks & Brokers

Morgan Stanley names Falloon as head of Asia Pac fixed income – memo
Morgan Stanley has named Ben Falloon as head of Asia Pacific fixed income markets, replacing Steve Glynn, who is leaving the firm, according to an internal memo seen by Reuters on Thursday.

Clearing & Settlement

CME Group Clearing: EREP New Release Login Changes

CME Group Clearing: NYMEX Options Expiration Operational Procedures for the Trading Floor and Clearing Members (WCO) Effective Thursday, March 13, 2014

Indexes & Products

ETF Money Back to Betting VIX Will Pop Higher
MoneyBeat – WSJ
While the Chicago Board Options Exchange Volatility Index remains low by historical standards even amid turmoil in Ukraine and worries about China, markets are seeing renewed interest in bets that volatility is likely to pop higher.

[SIX] Happy Birthday Sponsored Funds!
It has been a successful year for the attractive new segment of in which funds can be traded like shares.

Newly Launched STOXX Europe Low Beta High Div 50 Index Licensed To Deutsche Bank

SGX China A50 Futures And Nikkei 225 Options Fastest Growing Contracts Globally


TT Unveils Cloud-based Trading Platform, Will Sunset X_Trader
Anthony Malakian – WatersTechnology
Trading Technologies International (TT) today unveiled Nextrader, its new trading platform.

Object Trading Selects MarketPrizm To Offer Managed Direct Market Access
The Combined Service Provides Vended Market Data, Order Execution, Pre-Trade Risk Constraints And Managed Infrastructure Globally

Markit Expands European Pricing Data Service
Michael Shashoua – WatersTechnology
The data services provider has more than doubled the number of European asset-backed securities pricings it offers

Broadridge And Lombard Risk Form Strategic Alliance In The Collateral Management Sector
Broadridge Financial Solutions, Inc., a leading provider of technology-driven solutions for financial firms and corporate issuers globally, together with Lombard Risk Management plc,, a leading provider of integrated collateral management, regulatory compliance and reporting solutions, today announced they have formed a global alliance to address changing industry needs in the collateral management sector.


Former Credit Suisse Banker Admits To Helping Americans Hide Assets
Andrew Grossman – MoneyBeat – WSJ
A former Credit Suisse Group AG banker pleaded guilty Wednesday to helping Americans hide money in Switzerland and agreed to cooperate with the U.S. government as it investigates banks and their employees for aiding tax evasion.

Jefferies in $25 Million Settlement With S.E.C.
The Jefferies Group, the investment bank and brokerage firm, agreed on Wednesday to pay $25 million to settle accusations by the Securities and Exchange Commission that it failed to supervise traders who lied to investors about the price of mortgage-backed securities.

Financial Adviser Sidesteps Prison in Bond-Rigging Case
The names read like signposts on the highway of financial hardship — Detroit; Jefferson County, Ala.; San Bernardino and Vallejo, Calif. All have gone bankrupt in the last few years. But they also have another thing in common: They were victims of a vast bid-rigging scheme engineered by a Beverly Hills businessman, David Rubin, who tainted hundreds of municipal bond deals across the country and helped global banks cheat cities out of millions of dollars.

Defense for Madoff aides claims ignorance of fraud in closing arguments
Attorneys for five former aides of convicted swindler Bernard Madoff wrapped up nearly 20 hours of closing arguments on Wednesday, capping their courtroom campaign to convince a federal jury that their clients never knowingly joined in their boss’s Ponzi scheme.

U.S. judge clears Life Partners of fraud charge in SEC case
A federal judge on Wednesday reversed a jury finding that Life Partners Holdings and its executives were liable on one count of fraud, dealing a blow to U.S. securities regulators.

An Arrest In UK’s Financial Conduct Authority Boiler Room Investigation

Environmental & Energy

The battle for European carbon begins
Business Spectator
The European Union plan to adjust automatically the supply of carbon permits will start to be discussed by the region’s parliament in September, according to the assembly’s environment committee chair, Matthias Groote.

Poland Urges EU to Buy Russian Gas as Single Bloc
Patryk Wasilewski – The Wall Street Journal
Polish Prime Minister Donald Tusk Wednesday urged the European Union to consider joint natural gas purchases for the entire bloc in order to strengthen its purchasing power with Russia amid rising tensions in Ukraine.

Natural gas futures slump to 2-week low as spring looms
Natural gas futures fell to a two-week low on Wednesday, amid concerns that the arrival of spring will bring warmer temperatures throughout the U.S. and cut into demand for heating.


Will China’s Dim Sums Come Back to Bite?
MoneyBeat – WSJ
China’s opacity is making people nervous. When the Chinese economy was booming, investors were forgiving. They approached the Chinese economy the way a physicist might analyze a particularly obscure fundamental particle: by looking at its interactions with the rest of the world.

Thai Bourse And Krung Thai Bank Launch Exchange Service For USD Futures
Thailand Futures Exchange PCL (TFEX), under the Stock Exchange of Thailand (SET) group, and Krung Thai Bank pcl (KTB), will begin an exchange service for USD futures contract, enabling investors, especially small- and medium-sized enterprises (SMEs), as well as importers and exporters, to exchange US dollars at KTB branches. The service will start with USD futures contract maturing from March onwards.

[OSE] Adjustment and Change on Security Options

Hong Kong’s Securities And Futures Commission: Court Sets Trial Dates For China Metal Recycling (Holdings) Limited Case

Frontier Markets

Deutsche Bank: Count Russia As A Frontier Market
Katie Martin and Clare Connaghan – MoneyBeat – WSJ
Russian President Vladimir Putin spoke Wednesday about the importance of supporting “overall macroeconomic steadiness” in the country. Some investors and analysts, however, do not seem to be great fans.

Emerging markets: A crisis of confidence
Euromoney magazine
Investors, bankers and policymakers were caught off-guard in early 2014 as new depths of pessimism about emerging markets were plumbed.

Venezuela set to ease currency rules
Andres Schipani in Bogotá –
Venezuela’s Socialist government is expected to relax foreign currency market rules, aiming to easing shortages of basic goods that fuelled month-long protests which have left at least 24 dead.

Japan’s Mitsui Energy joins DME as trading member
Mitsui Energy Trading Singapore, which is wholly owned by Mitsui, has become the latest major energy trader from Japan to take a trading membership of DME, the Middle East’s premier international energy futures and commodities exchange.

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