First Read

John Lothian News Launches New Comprehensive News Website
JLN Announces JLN Financials; Sarah Rudolph Named Managing Editor of JLN

John Lothian News (“JLN”) is pleased to announce the launch of an eponymous comprehensive news website, The new site will combine content from all previous JLN news sites and into a single dynamic multimedia news portal, displaying all JLN original content, newsletters, commentaries, stories, videos and interviews.

JLN is also pleased to announce the launch of JLN Financials, a new newsletter that will replace JLN Interest Rates, JLN FX and parts of JLN Metals. JLN Financials coverage will include interest rates, FX, indices and gold.

Additionally, John Lothian News is pleased to announce the promotion of Sarah Rudolph to the position of managing editor. Also, Doug Ashburn will take on the title of vice president of John Lothian News in addition to his role as editor-at-large.

The site was designed by Ryan Lothian, the chief marketing officer of John J. Lothian & Company, Inc. The new site replaces our old sites,,,,,,, and

Each of the JLN newsletters will have its own landing page in the new site, with its current unique domain pointing to a unique subject related page. Additionally, we are adding unique subject related landing pages for Technology/HFT and Regulation.

The new site will highlight the breadth of original content produced by the John Lothian News team, some of which will continue to be incorporated into MarketsWiki and MarketsReformWiki


Managed Futures Gets Bloomberged, 3.0: Starting Over From the Beginning
John Lothian

One way to start a CTA business is by writing a newsletter and giving away your trading ideas and signals. Once you build a large enough audience, you start to charge a monthly fee for your service. Once you get enough people willing to pay for your service, you announce you will no longer be offering it as a newsletter, but will be offering it as a money management product.

This is what I intend to do.

I have the company set up, John J. Lothian Managed Futures, LLC (“JJLMF”). It is registered with the CFTC through the NFA as a Commodity Trading Advisor. The CTA registration includes a disclosure document approved for use, with a prior track record trading nearly the same programs from 2004 to 2011. I could start trading for customers any time.

But I am starting over. I am starting from the beginning. I am going to publish a daily newsletter for the next six months and give away the trading signals for the Maple Sugar trading program of JJLMF for FREE.

I want potential traders and investors to see the pure behavioral system in action. I want them to understand the risk we take, and the ones we avoid. I want them to build a trust in the system and the operator.

To read the rest of the article, visit the JLN website at


Garry Jones: LME’s Man of Steel … And Base Metals
Jim Kharouf
Garry Jones took the reins of the London Metal Exchange (LME) at the end of September. Just over a week into the job, he spoke with John Lothian News editor-in-chief Jim Kharouf about the LME’s next steps, what’s happening with the controversial warehouse issue, CME’s aluminum challenge and how LME’s parent company Hong Kong Exchanges & Clearing can become a metals powerhouse in Asia.

**JK – Its a bird, a plane, yep, just Garry flying to Hong Kong again.


NFA board members raised concerns about AlphaMetrix
Lynne Marek – Crain’s Chicago Business
National Futures Association board members had concerns about AlphaMetrix Group LLC, a struggling vendor that was hired by the association and futures exchange operator CME Group Inc. to monitor the balances of futures brokers.

***** For the record, James Koutolulas is concerned about everything. I like that about him.

AlphaMetrix Ousts CFO in Cash Crunch After Touting Due Diligence
Matthew Leising – Bloomberg
AlphaMetrix Group LLC, marketed as a haven for investors from scammers such as Bernard Madoff, fired its chief financial officer and said it faces a cash shortfall at the corporate level.

***** Includes quote from me as I had nothing better to do on a Friday night.


Hedge funds shun marketing route after lifting of ban
Stephen Foley in New York –
Hedge funds and private equity groups have not flocked to market their businesses to wealthy individuals, despite the lifting of a long-time ban on advertising to US investors. While ff Venture Capital, a small New York VC group, last week became the first to publicly advertise for backers and other upstart companies say they will follow suit, bigger players are planning to stick to their traditional private fundraising networks – at least for the time being.

***** Do you know how you can tell who the pioneers are? They are the ones with arrows in their backs. Hedge funds have bigger issues to fry right now.


Using social media to drive trading strategies
Dan Barnes – FOW
The shrill chatter of social media is a valuable source of data for traders. Using the right technology, firms can take online news and gauge sentiment and use that as a tool to make predictions on an asset’s price movements. For some it is a research tool supporting traders, for others it is a low latency data feed into lightning quick high-frequency trading engines.

***** Social media information is like dating a beautiful woman, you have to know what you are doing. And don’t act on the first thing that comes to your mind.


Commonsense ideas behind Taleb’s rhetorical flourishes
John Authers –
How fragile we are. Five years on from the Lehman Brothers collapse, political and regulatory errors have made the world’s financial system even more fragile. This alarming line of thought comes from Nassim Nicholas Taleb, best known for The Black Swan, which explained markets’ difficulties in pricing extreme events for which they had no precedent.

***** Run. And don’t look back.


Gary DeWaal’s Bridging the Week: October 7 to 11 and 14, 2013
The CFTC remained shut this past week, and as a result there was no news emanating from that agency. However, what was surprising was that there also was no significant news emanating from any of the principal international regulators or exchanges elsewhere either, although two exchanges announced interesti
ng developments: the Hong Kong Exchange took a pro-active step by raising its haircut on US Treasury Bills maturing in less than one year deposited as margin at its Clearing House to 3%; and the Chicago Mercantile Exchange said it will allow customers to engage in pre-trade discussions overnight on its Chicago Board of Trade and Kansas City Board of Trade GLOBEX-traded grain and oilseed options contracts.



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Lead Stories

Nasdaq taps UK regulator for NLX exchange
Tim Cave – Financial News
Nasdaq OMX has hired an executive from the UK financial services regulator for its fledgling London-based derivatives exchange as part of its drive to build volume in its longer-dated contracts.

Big Banks Can Be Dismantled, Say U.S. and U.K. Regulators
Jesse Hamilton – Bloomberg
Even one of the largest global banks could be taken apart safely by U.S. government authorities if it were to fail today, according to banking regulators from the U.S. and U.K.

CME reduces natgas price increment in bid to boost trading volume
Two Chicago Mercantile Exchange natural gas futures contracts will soon trade in $1 increments, down from the current $10 “tick”, in the exchange’s bid to boost trading volume and to match the value of its European gas options contract.

UK court to hear evidence ahead of landmark Libor ruling
A British court will this week consider whether attempted manipulation of the benchmark interest rate Libor can invalidate loans and other deals or show that banks mis-sold products that were based upon the rate.

CME Group eyes China futures opportunities
Michelle Price – Financial News
The CME Group, the world’s largest futures exchange, is eyeing new opportunities in mainland China as the company ramps up its expansion into the Asia-Pacific region. The 165-year old Chicago-headquartered exchange is looking to tap dramatic growth in the region’s derivatives market and is positioning itself to benefit as China takes tentative steps towards liberalising its futures market.

Credit Suisse chairman says no sign of foreign exchange rigging
Credit Suisse has found no evidence of foreign exchange market manipulation and that such a liquid market would be difficult to rig, its chairman said in an interview published on Sunday.

U.S. Said to Open Criminal Probe of FX Market Rigging
Tom Schoenberg – Bloomberg
The U.S. Justice Department has opened a criminal investigation of possible manipulation of the $5.3 trillion-a-day foreign exchange market, a person familiar with the matter said.

U.S. looking at alleged forex manipulation -source
The U.S. Justice Department is making inquiries into allegations of foreign exchange rate manipulation centered on the Swiss franc, but has left the heavy lifting to Europe, according to a source familiar with the probe.

Europe prepares to come clean on hidden bank losses
Euro zone countries will consider on Monday how to pay for the repair of their broken banks after health checks next year that are expected to uncover problems that have festered since the financial crisis.

Risk-taker Lance Uggla challenges Bloomberg
Philip Stafford –
Financial data empires often bear the name of their architect. However, while Markit does not bear the name of its co-founder Lance Uggla, the UK company’s rise over the past decade is closely associated with the enthusiastic 51-year-old Canadian.

My keystroke is my bond – Patrick L Young’s view on glitches
Following a visit to Cinnober’s head office in Stockholm, industry expert Patrick L Young gave us an in-depth interview on various hot topics in the financial industry. In the second video from this session, Patrick shares his view on the many recent glitches and how these have affected the industry.


Dispute resolution mechanism needed to resolve regulatory spats – EC’s Pearson
Matt Cameron –
The development of a dispute resolution mechanism is critical to resolve jurisdictional spats on derivatives and bank capital rules and ensure global convergence on regulation, according to Patrick Pearson, acting director of the financial markets directorate and head of financial markets infrastructure at the European Commission.

Hong Kong lags on Esma equivalence
Justin Lee –
Hong Kong is lagging behind other Asian jurisdictions in gaining European Securities and Markets Authority (Esma) recognition on the equivalence of its over-the-counter derivative regulatory regime as laws to implement its OTC derivatives framework are still in the process of being passed.

Calling the shots: recording trade-related communications
Robert Powell – FOW
One of the responses to the crisis in 2008 came in the shape of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). The Act has seen the creation of new authorities and capabilities that seek to ensure stability going forward. One part of Dodd-Frank is concerned with regulating the swaps market. The recording of all trade-related communications by traders active in the swaps market trading with, or in, the US is also covered.

Daniel Murdock Named SEC Deputy Chief Accountant

NFA Notice to Members I-13-31: Effective Date of New Business Continuity and Disaster Recovery Plan Reporting Requirements for FCMs and FDMs

Exchanges & Trading Facilities

NYSE Cancels Global Agreements as WFIC Attendees Call for Data Admin Standards
Faye Kilburn – WatersTechnology
NYSE Euronext has confirmed that it has put the introduction of its proposed new Global Data Agreements (previously known as Global Data License Agreements)—which seek to standardize the international exchange group’s multiple legacy data policies—on hold indefinitely as a result of NYSE’s pending merger with the IntercontinentalExchange.

NZX warned prices being led by ASX with more dual-lists
Tamsyn Parker – NZ Herald News
An academic says New Zealand’s local stock exchange needs to step up its game because the share price for dual-listed New Zealand companies is increasingly being led by the Australian stock market.

ASX Launches Futures Over The Resources And Financial Sectors
Today ASX launched futures contracts over the S&P/ASX 200 Resources Index and the S&P/ASX 200 Financials-x-A-REIT Index.

Moscow Exchange Launches Futures On Proprietary Shares
Trading in cash-settled Moscow Exchange ords futures is to be launched on the Derivatives Market on 14 October. The contract code in the trading system will be MEXC.

TMX Group Limited To Announce Q3 2013 Financial Results On Thursday, November 7, 2013

TOM MTF Statistics Week 41

Hedge Funds & Managed Futures

Hedge funds shun new European framework
Madison Marriage –
Hedge funds are shunning a new European framework aimed at improving protection for investors in alternative funds, due to the associated cost and compliance hurdles. Just 11 fund managers have signed up to the regime in the UK, which accounts for 74 per cent of European hedge fund assets under management, since it went live in July.

Odey Hedge Fund to Open in New York
Harriet Agnew – MoneyBeat – WSJ
One of the oldest hedge fund managers in Europe, Odey Asset Management, is opening an office in New York, saying “it’s mad we’ve never had an office there before.”

Bain Capital nears $5 bln for eleventh flagship fund
Buyouts Magazine
Bain Capital has raised nearly $5 billion for its eleventh flagship buyout fund, its first since the 2008 financial crisis, according to a potential investor in the fund.

Fund slammed after founder’s prostitution bust
Lawrence Delevingne – CNBC
Virtually all investors have fled Portland, Oregon-based Common Sense Investment Management following the arrest of founder Jim Bisenius for soliciting a prostitute, sources close to the matter said.

Trium Capital targets emerging hedge funds with new platform
Harriet Agnew – Financial News
Trium Capital, a London-based alternatives firm, is launching a hedge fund platform to help small and early-stage hedge fund managers grow to critical mass.

The universal truth that does not bear scrutiny
David Schofield – Financial News
At the risk of eternal damnation, I would like to question one of the “universal truths” that underlie thousands of investment products. This “universal truth” is the “small company” or “size” effect – the notion that small stocks outperform large stocks.

CEOs to Face Berkshire-Loyalty Test
Some investors and analysts are beginning to think about whether Berkshire will remain such a desirable place to work for senior executives after Buffett turns over the reins.

Banks & Brokers

J.P. Morgan Offers to Front Benefits if Government Doesn’t Pay
Michael J. Casey – MoneyBeat – WSJ
As if conjuring up the spirit of his bank’s founder, James Dimon is planning to take the place of the U.S. government if it goes into default—at least as far as his clients’ federal benefits go.

Diving Into J.P. Morgan’s Results by the Numbers
Steven Russolillo – MoneyBeat – WSJ
J.P. Morgan’s third quarter will be remembered for its ballooning legal costs, which drove the bank to its first-ever loss under Chairman and CEO Jamie Dimon.

Lloyds Exit Helps The Move Back to Basics – MoneyBeat – WSJ
Joe Ortiz
“Good riddance,” said one banking analyst on Friday after it was confirmed that Lloyds Banking Group had sold virtually all of its Australian business to Westpac Banking Corp for about £900 million in cash.

Wells Fargo 3rd-Quarter Net Up 13% on Improved Credit
MoneyBeat – WSJ
Wells Fargo reported a 13% rise in net income amid sharply lower provisions for loans gone bad, even as its lucrative mortgage business slowed from the year earlier. Earnings beat Wall Street estimates.

Bankers face pressure on IPO fees
Richard Partington – Financial News
Bankers are being forced to wait for increasingly long periods to get paid on initial public offerings as clients put greater emphasis on discretionary fees and push for longer review times.

Clearing & Settlement

Secretive start-ups eye uncleared OTC risk reduction
Duncan Wood –
Outside a small circle of dealers, few people have heard of LMRKTS and NetOTC, but these secretive start-ups hope to become some of the biggest players in the reshaped over-the-counter derivatives market. They – along with established firms such as TriOptima and CLS Bank and a couple of other players that are currently unwilling to show their hands – are vying to recreate the risk efficiencies lost in the move to mandatory central clearing, which breaks up currently offsetting positions and subjects them to separate margin and capital requirements.

SEFs By the Numbers: Day One
Will Rhode and Valerie Bogard, TABB Group
The launch of swap execution facilities on Oct. 2 was a success in that trading was largely uninterrupted and trade sizes remained in line with the OTC market. But many believe that overall swaps liquidity was negatively impacted, and the majority of buy-side firms did not trade on the first day. TABB Group breaks down the Day One numbers.

Lack of cross-border swaps clarity starts to bite
Anish Puaar – Financial News
Buyside firms are moving their trading in privately negotiated derivatives away from US banks to avoid being caught by aggressive US derivatives reforms.

Bats makes push into European trade reporting
Anish Puaar – Financial News
Bats Chi-X Europe, Europe’s newest equities exchange, has launched a new range of trade reporting services that will help it to boost data revenues and capitalise on the regulatory drive for more transparency.

ISDA Publishes ISDA 2013 Account Control Agreement

ISDA Publishes The ISDA 2013 Discontinued Rates Maturities Protocol

Indexes & Products

Legal & General considers moving into ETFs
Mike Foster – Financial News
Legal & General is reviewing a move into the $2 trillion exchange-traded fund sector, which would bring the UK insurer into a competitive market dominated by BlackRock’s iShares.

S&P Dow Jones Indices Announces Quarterly Index Reviews


CQG Adds Charts, Preps Mobile App
Max Bowie – WatersTechnology
Denver, Colo-based data, charting and trading software vendor CQG is adding a new range of chart studies to its Integrated Client front-end display, in response to client demand, is leveraging multi-threaded technology to boost the platform’s performance, and is rolling out an HTML 5-based mobile platform that can run on any browser-enabled mobile device.

Corvil Launches First Real-Time Operational Risk and Compliance Monitoring Solution for Electronic Trading Infrastructure
Corvil, provider of the leading monitoring platform for financial markets, today announced the first real-time general purpose risk and compliance monitoring solution for all kinds of electronic trading businesses. Suitable for use across all asset classes and very easy to integrate into existing infrastructures, the new Corvil solution solves the growing need for better control over high-speed electronic trading systems.


[AMF Canada] Société d’investissement Fjord inc. ordered to pay administrative penalty of $14,500

Environmental & Energy

China Ready to Help Achieve Climate ‘Breakthrough,’ Germany Says
China and the U.S. are more willing to act on climate protection, raising the chances for a “breakthrough” in United Nations-sponsored talks to curb global warming, German Environment Minister Peter Altmaier said.

Energy Bosses Call for End to Subsidies for Wind, Solar Power
The Wall Street Journal
Top executives of companies that provide half of Europe’s electricity production capacity on Friday called on politicians to end “distorting” subsidies for wind and solar power, saying the incentives have led to whopping bills for households and businesses and could cause continent-wide blackouts.

U.K. to Plan Budget for Low-CO2 Power Deals This Year
The U.K. government said it plans to propose by year-end budgets for each successive round of long-term power contracts that will be awarded under new laws to boost nuclear and renewable power.


Asia’s New Banking Stars; Transaction Services Offset Slowing Investment Banking Revenue
Enda Curran – MoneyBeat – WSJ
When discussing hot areas of banking, transaction services aren’t exactly top of mind. But as Asia’s rainmakers struggle to drum up mega mergers or capital raisings, the pointy heads are having their day.

Shanghai’s free trade zone to spur China interest rate hedging market
Garima Chitkara –
The Shanghai free trade zone (FTZ) could provide a boost to the interest rate hedging market in China as market participants are able to experiment with hedging market-driven rates in the new zone, according to observers.

Big appetite for new China banking licences
Simon Rabinovitch in Shanghai –
Would you like a 30-year mortgage to go with your air conditioner? How about no-fee chequing along with your flat-screen television? These are the kinds of questions Chinese manufacturers and retailers could soon be asking their customers if they get their way and are permitted to set up banks.

Hong Kong’s Securities And Futures Commission Signs MoU With The Financial Regulatory Commission Of Mongolia
The Securities and Futures Commission (SFC) and the Financial Regulatory Commission of Mongolia (FRC) today entered into a Memorandum of Understanding (MoU) in Ulaanbaatar, Mongolia (Note 1). The MoU – signed by the Chairman of the SFC, Mr Carlson Tong, and the Chairman of the FRC, Mr Dashdondov Bayarsaikhan – establishes a framework for mutual assistance and facilitates the exchange of information between the two regulators.

Latest Chief Executive HKEx Live And Direct – Charles Li Direct

Frontier Markets

Borsa Istanbul, Nasdaq agreement to finalize in December
World Bulletin
Nasdaq OMX Group and Borsa Istanbul (BIST) may finalize strategic cooperation agreement in December, said Ibrahim Turhan, BIST’s chairman and CEO.

NCDEX integrates futures trade with spot market
Business Line
The National Commodity and Derivatives Exchange (NCDEX) has integrated its futures trading platform for 20 commodities with the spot market.

The closing bell?
Business Standard
“Picture abhi baki hai, mere dost,” roared the 5-feet-4-inches tall, stocky man in a perfect suit made of the finest fabric available at Gabbana, a clothing store favoured by Mumbai’s business elite. The listeners – the speaker’s employees and investors – cheered loudly. “You ain’t seen nothin’ yet,” they had just been told; what more could they have asked for? That was in October 2008

Analysis: Late Fed taper may do more harm than good for emerging nations
Emerging nations heaved a sigh of relief when the Federal Reserve last month decided not to reduce its monetary stimulus. By postponing the inevitable, the U.S. central bank took pressure off emerging markets to implement reforms that could make them more resilient when the Fed does eventually reverse policy.

DGCX Year-To-Date Volumes Grow 69% At The End Of Q3 2013

The Egyptian Exchange (EGX) Monthly Statistical Report September 2013

TSE News – Financing Activities By Tehran Stock Exchange’s Listed Companies

Malawi Stock Exchange Weekly Trading Report – 11th October, 2013

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