First Read

Remarks Of CFTC Chairman Timothy G. Massad Before The Futures Industry Association Expo 2014
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***DA: The theme of his speech seemed to be “reassurance.” He demonstrated a willingness to work with the industry, both here and abroad, to tweak the parts of the new regulatory regime if such tweaks are necessary for the good of the industry. Combined with the three rules put forward on Monday – residual interest, recording of transactions and volumetric optionality, I see a more sensible commission. Maybe we can reverse the dwindling FCM trend

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Fidessa Examines How Algos Bring Efficiency And Predictability To Derivatives Trading
Fidessa group plc has today announced the release of a new paper entitled Defining algos in futures markets. Authored by Yuriy Shterk, Head of Derivatives Product Management for Fidessa in the Americas, it explores the growth of algos in derivatives markets. More specifically it discusses the types of algos currently in use, the importance of transparency and accountability, and the benefits of embedding algos into the trading workflow.
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***** My head hurts. But maybe it is too many EXPO parties.

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CFTC’s Cybersecurity Checks Hurt By Budget Constraints, Chairman Says
Andrew Ackerman And Jacob Bunge – WSJ
The Commodity Futures Trading Commission is so cash-starved that it lacks the resources to independently test the cyberdefenses of the entities it oversees, its top official said.
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***** The CFTC would very much like to upgrade from the free virus protection software.

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ADM’s Juan Luciano to Take Over CEO Post From Patricia Woertz
Jacob Adelman – Bloomberg
Archer-Daniels-Midland Co. (ADM) appointed Juan R. Luciano as chief executive officer, replacing Patricia Woertz, who will remain chairman of the world’s largest corn processor.
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***** Best of luck to Juan Luciano in his new role.

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Post-Trade Views: Euronext’s Andrew Simpson on Interoperability and Open Access
JohnLothianNews.com
Financial regulators began their overhaul a few years ago with several goals in mind, one of which was to make clearing and trading venues more open and transparent. But can cash securities and derivatives be shoehorned into the same set of rules? Andrew Simpson, head of post-trade services at Euronext, compares the regulatory objectives with the realities of the market.

Watch the video »

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ICE launches Belgian ZTP natural gas futures
Futures & Options World
Intercontinental Exchange has launched Belgian Zeebrugge Trading Point (ZTP) Natural Gas futures, developed in conjunction with Fluxys Belgium, the natural gas transmission system operator.
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Will Commodity Traders Replace Banks as Swap Dealers? I Think Not
Streetwise Professor
As many (but not all) banks reduce their paper and physical commodity market activities, it is often suggested that commodity trading firms like Glencore, Vitol, Trafigura and Mercuria will step into the breach, and become swap dealers offering customized risk management structures to clients (and loans to customers to boot).
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***** When, not will.

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Patrick Birley, CEO of ISDX – Variety is the Spice of Life
JohnLothianNews.com

“If you’re not happy with what you do, change. Do something else. Take the risk and get out there. “

Patrick Birley, CEO of ISDX, discusses his numerous career path transitions. Starting with an entrepreneurial experience for an exchange in Africa, Birley highlights the success he achieved and how he thought he would be unstoppable in his career. After a life changing event that forced him to reconsider the safety of his family, Birley returned with his family to the UK and ended up switching from several other corporate and entrepreneurial positions, until finally landing where he is today. In between those jobs, Birley became involved in the brewing industry before returning to the financial world. All these various experiences helped shape both Birley’s personality and professional attitude. His overall message is to take advantage of new opportunities and be willing to try something else if you don’t enjoy what you currently are doing.

Watch the video »

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Lead Stories

Nasdaq Wins Committee Vote for Right to Run Stock Feed
Sam Mamudi – Bloomberg
Nasdaq OMX Group Inc. won the right to keep running a key piece of trading infrastructure for thousands of U.S. stocks including Apple Inc. The committee overseeing the securities information processor, or SIP, as the system for distributing Nasdaq stock prices is known, selected the exchange operator over Tradeworx Inc.’s Thesys Technologies LLC division, according to a person with knowledge of the matter, who said the vote was unanimous.
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JPX Boosting Trading Speed to Gain Edge on Competition
Eduard Gismatullin – Bloomberg
Japan Exchange Group Inc. is upgrading its trading systems in the biggest overhaul since 2010 to boost transaction speed and win more business. The operator of the national bourse plans to replace the Arrowhead cash equity matching engine next September and revamp the derivatives system in 2016, said Hiromi Yamaji, chief executive officer of Osaka Exchange Inc., a unit of Japan Exchange.
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Moody’s sees $14.5bn FX fines for top banks
Risk.net
Credit ratings agency Moody’s has estimated some of the largest banks in the foreign exchange market will end up paying regulators a total of $14.5 billion in fines for alleged misconduct around FX benchmarks.
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New push to ease Japan commodity trading rules
Ben McLannahan in Tokyo – Financial Times
A top Japanese politician is pushing for an overhaul of regulation governing exchanges, potentially opening the door to a long-awaited consolidation of the country’s fragmented trading landscape.
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Exchange giants slam speed bump plan
Futures & Options World
The world’s top futures exchange chiefs have spoken out against US plans to introduce speed bumps on traders in a bid to curb the activity of high-speed traders. The chief executives of the CME Group, the Intercontinental Exchange and Eurex told the Futures Industry Association Expo even in Chicago the introduction of speed restrictions will make the market less efficient.
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U.S. Money-Laundering Probe Touches Putin’s Inner Circle
Christopher M. Matthews and Andrew Grossman – WSJ
U.S. prosecutors have launched a money-laundering investigation of a member of Vladimir Putin’s inner circle, several people familiar with the efforts said, in a politically sensitive escalation of pressure on the Russian president’s cadre of billionaire supporters.
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Regulatory

Banks Get Softer Tone From CFTC on Overseas Swaps Rule
Silla Brush – Bloomberg
After years of battling to limit the overseas reach of U.S. swaps rules, Wall Street is beginning to hear a more flexible approach from one of its top regulators.
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U.S. judge criticizes SEC use of in-house court for fraud cases
Nate Raymond – Reuters
A Manhattan federal judge who gained prominence by rejecting U.S. Securities and Exchange Commission bank settlements urged the agency on Wednesday to reconsider becoming “a law unto itself” by increasingly bringing cases in-house instead of in court.
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Effort Begins for More Say on Directors
GRETCHEN MORGENSON – NY Times
Annual shareholder meetings are supposed to allow a company’s owners to change troubling governance practices such as outsize executive pay or directors who neglect their fiduciary duties.
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CFTC Commissioner Sharon Bowen FIA Expo Inaugural Speech, November 5, 2014
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ESMA: Steven Maijoor Speaks At EC Growth For Finance Conference In Brussels
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Exchanges & Trading Facilities

TradingScreen enters fixed income platform race
John Bakie – The Trade
TradingScreen has become the latest entrant in the competitive fixed income electronic trading space, launching what it calls the first “buy-side designed” trading platform for corporate bonds.
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CEE exchange consolidation: Fair exchange
Lucy Fitzgeorge-Parker – Euromoney Magazine
Stock exchange consolidation is back in focus in emerging Europe after the appointment of a new head for the Warsaw bourse. Further tie-ups across the region could yet prove politically problematic.
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Nasdaq OMX Expands Market Access in Chicago for Futures & Options Trading Community
Ivy Schmerken – Wall Street & Technology
Nasdaq will open a point of presence (PoP) in Chicago, enabling traders in the midwest to connect with the eSpeed bond trading platform as well as Nasdaq cash equity and equity derivatives markets.
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London Metal Exchange may temper trading fee rise after complaints
Eric Onstad – Reuters
The London Metal Exchange (LME) said it might revise a planned hike in trading fees after customers complained that it could hurt their businesses.
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Intercontinental Exchange Completes Transition Of Liffe’s European Interest Rates To ICE Futures Europe
Now Trading On The ICE Platform Alongside US Rates Contracts – Equity Derivatives To Transition Nov 17
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Euronext ahead of schedule with cost savings as revenues grow
Anna Irrera – Financial News
Euronext has slashed costs at a faster pace than expected, as it lays out the priorities of its new strategy as an independent business.
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Ice to launch Brent and gold contracts in Asia
Risk.net
US exchange looking to tap into regional commodities demand with its SMX purchase Ice is looking to launch five separate contracts when its Asia clearing house goes live on March 17 next year, with market sources indicating that Brent crude and gold are the likeliest to go ahead, potentially joined by two agricultural products and a regional oil contract.
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Intercontinental Exchange Reports ICE And NYSE Volume For October 2014 – Cash Equities ADV Up 32% Year On Year
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Eurex: Record Trading Levels For Volatility Derivatives In October – New All-Time Monthly Volume Record Of Around 1.5 Million Contracts
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MarketAxess Announces Monthly Volume Statistics for October 2014
MarketAxess Holdings Inc., the operator of a leading electronic trading platform for fixed-income securities, and the provider of market data and post-trade services for the global fixed-income markets, today announced total monthly trading volume for October 2014 of $78.3 billion, consisting of $47.4 billion in U.S. high-grade volume, $25.1 billion in other credit volume, and $5.8 billion in liquid products volume.
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Nasdaq October 2014 Volumes
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Continuation In Reforming The Market Pushed Bucharest Stock Exchange Turnover And Financial Results Higher Than Expected
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ASX Group Monthly Activity Report – October 2014
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TOCOM October Volume Averaged 111,633 Contracts Per Day, Up 21.3% M-on-M
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CME Group Declares Dividend
CME Group Inc., the world’s leading and most diverse derivatives marketplace, today declared a fourth-quarter dividend of $0.47 per share, payable December 26, 2014, to shareholders of record as of December 10, 2014.
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Xetra/Börse Frankfurt: Fenghua SoleTech AG IPO in the General Standard
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Direct Edge Regulatory Notice #14-06: Notice Regarding Amendment To EDGA Exchange And EDGX Exchange Limitation Of Liability
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Hedge Funds & Managed Futures

Ten global funds capitalising on Japan’s surprise QE boost
Dan Jones – Investment Week
Just 24 hours after the Federal Reserve ended QE in the US, the Bank of Japan surprised global markets last Friday by extending its own stimulus programme. We look at ten global equity funds which may benefit.
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Goldman Sachs Sells $285 Million in Hedge Fund Holdings
Nathaniel Popper – Dealbook – NY Times
Goldman Sachs is continuing to sell off its hedge fund holdings, including $285 million during the third quarter of this year, as the start date for the Volcker Rule draws closer.
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Hedge fund nightmare turns into a dream
Miles Johnson – Financial Times
Do computers that trade financial markets ever have nightmares about losing money? It is a question investors have asked in recent years of the hedge funds that use automated algorithms and models to buy and sell billions of dollars of assets.
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Campbell hires Kathryn Kaminski as director
The Hedge Fund Journal
Campbell & Company today announced that Kathryn (Katy) Kaminski, PhD will join the firm as director, Investment Strategies, effective 2 January, 2015. Kaminski is currently deputy managing director of the Institute for Financial Research, a research affiliate of the Stockholm School of Economics.
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Banks & Brokers

HSBC names global advisory head for resources and energy
Matt Turner – Financial News
HSBC has appointed a former JP Morgan veteran who has worked on natural resources deals for the likes of BHP Billiton, Vedanta and Fresnillo.
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Deutsche hires Nolan to head custody and clearing
Reuters
Deutsche Bank has hired Elizabeth Nolan from JP Morgan to be its head of custody and clearing. She joins the firm’s London office in January, and will report to Rafael Moral, head of investor services within the institutional cash and securities services business.
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Commerzbank Profit Triples – WSJ
Eyk Henning – WSJ
Commerzbank AG said Thursday that net profit tripled to EUR225 million ($280.9 million) in the third quarter as provisions for bad loans dropped and revenue increased as the lender braces for significant fines from U.S. investigators.
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ICAP: Electronic Broking: October 2014 Volumes
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EBS Market Demonstrates Continuous, Deep And Reliable Liquidity In All Regions During Exceptionally Volatile Markets – $250bn Total Spot FX Volume Traded On 31 October
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Clearing & Settlement

Indexes & Products

ETF Trading Last Month Was Heaviest Since 2011 – Focus on Funds
Chris Dieterich – blogs.barrons.com
Daily trading in exchange-traded funds last month was the heaviest in three years as market players zipped in and out of positions as stocks careened lower, according to Credit Suisse.
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Nasdaq Lists First Trust Emerging Markets Local Currency Bond ETF And First Trust Low Duration Mortgage Opportunities ETF – Two Actively Managed Funds Focused On Current Income Opportunities
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Enternext Announces “Enternext© PEA-PME 150” Index Composition
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Technology

Trading Technologies Previews New X_TRADER Functionality and Introduces TT Mobile Trading App at FIA Futures & Options Expo
Trading Technologies International, Inc. (TT), a provider of high-performance professional trading software, today announced it will release new cross-market aggregation and enhanced yield-trading functionality for its flagship X_TRADER product this quarter. The company also has released Android and iOS versions of the TT Mobile trading application for early-stage users of the next-generation TT trading platform.
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CQG’s Continuum offers Access Points in Illinois to TOCOM Market Data
Dan DeFrancesco – WatersTechnology
Market data on the Tokyo Commodity Exchange (TOCOM) will now be made available through CQG’s Continuum’s Quotes Direct in two locations in Illinois.
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Nomura Joins Trading Technologies’ MultiBroker Platform
Trading Technologies International, Inc. (TT), a provider of high-performance professional trading software, and Nomura, a leading Asia-based financial services group, today announced Nomura is now a participating broker in TT’s global MultiBroker service. Customers may select and route orders to Nomura through TT’s high-performance global trading network, which provides direct market access (DMA) to 40 markets across five continents.
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Big data firm wins asset management fintech challenge
Anna Irrera – Financial News
A London-based startup that gives asset managers insights on big data has won the second edition of the 3D FinTech Challenge contest designed to find innovations for fund managers.
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Perseus sets up irish ops center
WatersTechnology
Fiber and microwave network provider Perseus Telecom has set up a network operations center in Galway, Ireland to provide 24/7 operations support for the vendors clients 365 days per year to support the vendor’s managed network services.
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Fixnetix expands chicago cme co lo services
WatersTechnology
Low-latency data and trading infrastructure provider Fixnetix is to expand its connectivity footprint in Chicago by providing co-location and IT services in CME Group’s hosting facility located in the Digital Realty Trust building at 350 East Cermak Road in downtown Chicago.
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Enforcement

Ex-Ameriprise broker pleads guilty after SEC insider trading case
Nate Raymond – Reuters
A former Ameriprise Financial Inc stockbroker previously accused by U.S. securities regulators of engaging in insider trading ahead of a 2010 merger by Pfizer Inc has pleaded guilty to conspiracy to commit securities fraud.
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SEC Sanctions 10 Companies for Disclosure Failures Surrounding Financing Deals and Stock Dilution
The Securities and Exchange Commission today announced enforcement actions against 10 companies for failing to make the required disclosures about financing deals and other unregistered sales that diluted their stock.
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[AMF Canada] High-Yield Investment Programs – Caution when dealing with Steeve Beaudin and maxhyip.com
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Environmental & Energy

Greens beaten back but not broken after election
Timothy Cama, The Hill
Environmental groups see the results of the midterm elections as a major loss for their priorities, but they haven’t completely lost hope.
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Mixed results for local anti-fracking measures
Timothy Cama, The Hill
Voters in some localities in Texas, Ohio and California voted to ban or put new restrictions on hydraulic fracturing for oil and natural gas, though other ballot measures in those states failed.
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***LB: Also in this story “Denton, Texas; Athens, Ohio; and San Benito and Mendocino counties in California passed ballot measures to restrict fracking, the controversial method of injecting fluid into wells to extract more oil and gas.”

Texans Vote To Ban Fracking
Ari Philllips, Climate Progess
On Tuesday, voters in Denton, Texas, banned fracking within the city limits by a large margin of 59 to 41.
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Asia-Pacific

Japan Exchange Wants to Join Hong Kong-Shanghai Link
Eduard Gismatullin – Bloomberg
Japan Exchange Group Inc., the country’s main bourse operator, wants to join the planned equity-trading link between Hong Kong and Shanghai.
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JPX opens up in Hong Kong, as volumes head higher back home
Simon Osborne – The Trade
The Japan Exchange Group (JPX) has announced that its subsidiaries Tokyo Stock Exchange (TSE) and Osaka Exchange have opened a representative office in Hong Kong this month.
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Hong Kong banks compete for offshore renminbi
Gabriel Wildau in Shanghai – Financial Times
Offshore renminbi interest rates in Hong Kong have climbed to near record highs this week as banks compete for funds in preparation for the launch of a highly anticipated trading link that will grant investors there unprecedented access to China’s mainland equity market.
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SGX markets’ outage resulted from malfunction in power supply
Singapore Exchange (SGX) today said its securities and derivatives markets experienced an outage, as a result of multiple power supply issues, affecting SGX’s hardware providing market participants’ connectivity. The outage did not arise from a cyber-attack.
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HKEx Monthly Market Highlights – October 2014
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HKEx On-Floor & Off-Floor Trading Statistics
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Frontier Markets

Saudi NCB’s $6 Billion IPO Heavily Oversubscribed
Ahmed Al Omran – WSJ
National Commercial Bank’s $6 billion initial public offering was heavily oversubscribed as retail investors placed orders worth more than 23 times the shares that Saudi Arabia’s biggest bank by assets offered for sale.
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Miscellaneous

Caught in Insider Trading Crackdown, Ex-Galleon Trader Turns It Around
Anita Raghavan – Dealbook – NY Times
Adam Smith, a portfolio manager at the now-defunct hedge fund the Galleon Group, always seemed to have a Plan B.
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