Bits & Pieces
By John J. Lothian
Monday is Labor Day in the U.S. and we will not be publishing JLN that day. Have a nice weekend and enjoy the light news load from the end of summer.
On Monday, Doug Ashburn and I are headed to Stockholm, so the JLN team back in the States will handle JLN.
Doug and I move to London on Wednesday. We are there to help CBOE celebrate the opening of their London office in an event on Thursday.
We will have more news about our MarketsWiki Education World of Opportunity series once we return from Stockholm and London. For now, please continue to enjoy the rollout of our videos from Chicago and New York. We are through the first two Chicago sessions, and are working our way through Day 3. After next week, we will start on New York and, let me tell you, there are some doozies.
Oh, and we are soft-launching a new version of the johnlothiannews.com website today. Once JJLCO CIO Jeff Bergstrom wakes up from his slumber after a 24-hours workday as he tweaked the new site, we will pat him on the back for a job well done.
Have a nice weekend!
LME to move back into headquarters
The London Metal Exchange said it will move back into its headquarters after a structural problem with the building forced its traders to decamp to an Essex business park for over a month.
***** Welcome home LME.
Thomas Wittman Joins OCC Board Of Directors
OCC, the world’s largest equity derivatives clearing organization, announced today that Thomas A. Wittman, a veteran exchange executive, has joined the board of directors as an Exchange Director, replacing Gary Katz, formerly of The International Securities Exchange (ISE).
***Tom Wittman is now the most powerful person on the OCC board, representing a 40% ownership stake.
Tracy Raben, OCC – From Hire to Retire: Talent Management and Culture Transformation
“We start with the business strategy, align that with the goals and objectives, then align the employees with the goals and objectives of the organization to help everyone understand the big picture and your role in it, and ultimately how you are going to be evaluated, recognized and rewarded for your performance and contributions.”
From a full management makeover to a change in its capital structure to its designation as a systemically important financial market utility, OCC, the central clearing organization for the U.S. options markets, has undergone sweeping changes in the last few years. These changes have required OCC to aggressively ramp up its compliance, risk and systems departments.
The task has been a challenge for Tracy Raben, chief human resource officer, who is in charge of pulling together the right mix of people, developing talent and keeping employees aligned with the company vision. Oh, yeah. She also needs to help the team maintain a healthy work/life balance.
According to Raben, these are the components of a high-performance culture.
***Note: We are now publishing videos from our third and final Chicago event, which was held at Trading Technologies on July 15, 2016. For your convenience, we have put together summaries of Sessions 1 and 2, with embedded videos of all the speakers. VIEW SESSION 1
VIEW SESSION 2
Triennial Central Bank Survey of foreign exchange and OTC derivatives markets in 2016
Bank for International Settlements
Trading in foreign exchange (FX) markets averaged $5.1 trillion per day in April 2016, according to the 2016 Triennial Central Bank Survey of FX and over-the-counter (OTC) derivatives markets. This is down from $5.4 trillion in April 2013. FX spot trading declined for the first time since 2001, even as activity in FX derivatives continued to increase. Trading in OTC interest rate derivatives averaged $2.7 trillion per day in April 2016, up from $2.3 trillion in April 2013.
***** What is $5.1 trillion among friends?
DTCC on Trends in Cyber Security
Cyber security continues to be a critical area of focus for financial services firms. In this video interview, Stephen Scharf, DTCC Chief Security Officer, details current and emerging trends in cyber security and how firms are investing in their cyber security systems to help identify and fix weaknesses and vulnerabilities.
Thursday’s Top Three
Ken Griffin’s foray into credit derivatives took first place yesterday, in the Bloomber story Ken Griffin’s Citadel Securities Is Muscling Into Credit Derivatives. In second place was a story called Why Luck Plays a Big Role in Making You Rich. DRW’s Jeff Levoff would disagree, in this MW Education video from July. Rounding out the top three was The Trade News’ story on the reshuffling of ABN Amro Clearing leadership in Chicago.
|Demystifying High Frequency Trading
Please join CAIA Chicago and Optiver
In this talk we present a sober, but honest view of High Frequency Trading and shed some light on the use of a computer technology in trading.
5:00pm – Snacks, Drinks, and Networking
Event Fee – $15.00 USD
++++Lead StoriesNordic Bourses That Have Dethroned London Pile On Post-Brexit
Johan Carlstrom – Bloomberg
Nasdaq Nordic has posted the most listings in Europe in 1H; President concerned by possible cuts in U.K. corporate tax
The pan-Nordic market place that has already dethroned London as Europe’s most attractive stock exchange is ready to scale up its efforts to steal business from the U.K. following the country’s vote to leave the European Union.
goo.gl/zydPL1***DA: There is a reason we are being courted by Stockholm to bring our MarketsWiki Education series there.Dark Pools’ Record Share Signals Looming Market Shock in Europe
John Detrixhe – Bloomberg
Dark-pool trading has jumped 6.2 percentage points since 2010; EU rules starting in 2018 will limit trading on the venues
Dark pools’ share of European stock trading has risen to a record, putting the traders who use them on a collision course with new regulations that will restrict buying and selling on the venues.
goo.gl/H1hpxhMan Group Shuffles Senior Management Under New Chief Executive
By CHAD BRAY – NY Times
The British hedge fund manager Man Group said on Friday that it would shuffle its senior management less than two months after announcing its chief executive was departing for the bond giant Pimco.
goo.gl/vKiFwxGlobal Banks Said to Seek Brexit Deal to Keep Status Quo
Richard Partington, Gavin Finch – Bloomberg
Plan would look to safeguard passporting rights for banks; A short timeframe for exit could spark exodus, PwC’s Gray says
The world’s biggest banks are pressing U.K. Prime Minister Theresa May to strike an interim agreement with the European Union for financial companies before formal exit talks start, according to two people with knowledge of the matter.
goo.gl/xKtAOFEchoes of 2008 as danger signs are ignored; Absent from Jackson Hole was a full-blown discussion of issues concerning financial practitioners
by: Gillian Tett – FT
Ten years ago when the world’s central bankers gathered in Jackson Hole for their annual retreat in the majestic Teton Range in Wyoming, their community was marked by an intellectual divide. This was not between “left-” and “right-” wing economists; instead, the crucial faultline was whether the mandarins did or did not care about finance.
/goo.gl/RzW6cLBank Groups Weigh Legal Challenge to Fed Stress Tests; A big point of contention among banks is the tests’ opacity
By EMILY GLAZER and RYAN TRACY – WSJ
Bank trade groups and industry advisers are debating the possibility of legally challenging the Federal Reserve in an attempt to force changes to annual “stress tests” of the biggest U.S. lenders, people familiar with the talks said.
goo.gl/c3wN83A Plea for Plain English in Financial Documents
Steve Lipin and Adam Rosman – NY Times
Why are many financial news releases and publicly filed documents written so poorly?
How many times in reading a deal, initial public offering or financial news release have you seen phrases like “pursuant to which,” “whereby” or a document that starts out with a disclaimer in BOLDFACED ALL CAPS that often seems as if it requires a Ph.D. to comprehend? We — one of us is a communications adviser (and former Wall Street Journal reporter) and the other is a general counsel — have come together to raise the torch for good writing. The investing public deserves better.
goo.gl/4MZBqwWant a Free Market? Abolish Cash
Narayana Kocherlakota – Bloomberg View
If you believe that government meddling in financial markets was responsible for the last recession and the lackluster recovery, you might be right. But probably not in the way you think.
/goo.gl/Xsu2ob***DA: Ever wonder why gold bugs are so paranoid? Read this and then tell me who the sane ones are.Swiss watches, corruption battles and the high price of Facebook shares
James Saft – Reuters
Despite Facebook being locked out of China since 2009, Mark Zuckerberg can, in part, thank the Party for the healthy valuation of Facebook shares. That’s because the fewer Swiss watches corrupt officials in China buy, the more shares of Facebook the Swiss National Bank does. Now follow along as we trace a particularly bizarre train of cause and effect in a world where China is a huge economic force and central banks are some of the world’s largest equity investors. Butterflies beating their wings in the rainforest of Brazil have caused hurricanes in the Gulf of Mexico easier to predict than this.
goo.gl/75ebxFWhat a Hurricane Means for Orange Juice and Cotton Futures
Julie Wernau – WSJ
Hurricane Hermine in on track to give Florida its first hurricane in 11 years. That has orange juice and cotton futures surging on fears that important growing regions for those crops could be damaged by high winds and rain at key times in the growing season. The storm is expected to cut into Georgia and the Carolinas after it strikes Florida, where cotton bolls are open in between 13% and 30% of cotton crops. The bolls form a protective case around developing cotton and once open are vulnerable to rain, dirt and other environmental factors that can lower cotton quality.
goo.gl/0fVaUU6 senior women on Wall Street share their best career advice
Portia Crowe – Business Insider
Building a successful career on Wall Street is never an easy task.
goo.gl/UbirTmEmbattled Currency Market Proves Resilient to Global Threats
Anchalee Worrachate, Lananh Nguyen – Bloomberg
Daily volume drops 5% from 2013 in BIS triennial survey; Spot trading falls for first time since 2001; swaps use rises
The strength of the global foreign-exchange market surprised many when the Bank for International Settlements published its latest triennial survey on the industry.
goo.gl/ovJMDbExchanges, OTC and ClearingThe stock market is vanishing
Bob Bryan – Business Insider
The stock market isn’t what it used to be. As noted by Steven DeSanctis, equity strategist at Jefferies, the sheer number of companies listed on stock exchanges has been dropping off precipitously.
goo.gl/NLiVQpCME Group Reached Average Daily Volume of 13.8 Million Contracts per Day in August 2016; Average Daily Volume to Date in 2016 Up 9 Percent
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that August 2016 average daily volume (ADV) reached 13.8 million contracts per day, down 15 percent from August 2015. CME Group year-to-date 2016 ADV through August averaged 15.5 million contracts per day, up 9 percent. Total open interest was 105 million contracts at the end of August, up 15 percent from year-end 2015.
goo.gl/XGQc76Securities Lending Times: “High standards” by Jan Grunow; Jan Grunow of Swiss Life Asset Managers in Switzerland reveals how an insurance company makes light work of new margin requirements.
Swiss Life Asset Managers (AM) has quite a long tradition of daily cash collateral exchange to level out valuation changes in over-the-counter (OTC) derivatives positions. The use of OTC derivatives is important for Swiss Life AM to hedge the assets of the insurance company Swiss Life Ltd and Swiss Life funds.
goo.gl/RUF4O8Trading statistics August 2016
In August 2016, the international derivatives market Eurex, part of Deutsche Börse Group, recorded an average daily volume of 4.1 million contracts (August 2015: 5.8 million). In total, 93.6 million contracts were traded at Eurex in August.
goo.gl/5YF33TTurnover at Deutsche Börse’s cash markets at 93.3 billion euros in August
Order book turnover on Xetra, Börse Frankfurt and Tradegate Exchange across all asset classes stood at EUR93.3 billion in August (August 2015: EUR142.3 billion).
goo.gl/4X7znZSTOXX changes composition of blue-chip indices
STOXX Ltd., the operator of Deutsche Boerse Group’s index business, and a global provider of innovative and tradable index concepts, today announced the results of the regular annual review of the STOXX Blue-Chip Indices, among them the STOXX Europe 50, EURO STOXX 50 and STOXX Nordic 30 indices; as well as the results of the second semi-annual review of the STOXX Eastern Europe 50 Index. All changes will be effective with the open of European markets on Sep. 19, 2016.
goo.gl/w12KN7Turnover In Excess Of EUR 6.5 Billion Generated By Boerse Stuttgart In August
Trading volume up on previous month; Significant increase in turnover in investment products; Debt instruments (bonds) and equities also record growth
According to its order book statistics, Boerse Stuttgart generated turnover of more than EUR 6.5 billion in August 2016. Trading volumes were up more than 4 percent in comparison with July.
goo.gl/UwFGPoOCC Cleared Contract Volume Down 24 Percent In August – Securities Lending CCP Activity Grew 35 Percent In August And 41 Percent Year-To-Date
OCC, the world’s largest equity derivatives clearing organization, announced today that cleared contract volume in August was 331,447,840 contracts, down 24 percent from August 2015 record volume of 434,313,474 contracts. OCC’s year-to-date average daily cleared contract volume is down three percent from 2015 with 16,375,448 contracts in 2016.
goo.gl/0kMhZFMGEX Reports 3rd-Highest Monthly Volume of All Time
MGEX, a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), has concluded the month of August with a total volume of 260,405, making it the 3rd-best month in the history of the Exchange.
goo.gl/AWQzcyOneChicago Announces Trading Volume For August 2016 – Year-To-Date Volume Up 2
OneChicago, LLC (OCX), a securities finance exchange, today announced its August 2016 volume of 1,025,240, a decrease of 21% 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.
goo.gl/DSZ8xgKey figures SIX Swiss Exchange and SIX Structured Products Exchange: August 2016
A total of 32,095,451 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 7.6%. There have been 30,724,164 trades in the equities including funds + ETPs segment, equating to a decline of 7.0%. 257,143 trades (-21.7%) have been conducted in the CHF bonds segment.
goo.gl/ZkT7QRPEGAS Registers A Strong Volume Push In August With A Record On TTF Spot
PEGAS, the pan-European gas trading platform operated by Powernext, registered a total volume of 125.0 TWh in August 2016 which represents a growth of 90% compared to the previous year (65.9 TWh) and 45% compared to July 2016 (86.1 TWh). This development is reflected on all PEGAS markets with 49.9 TWh on the spot and 75.1 TWh on the futures segments.
goo.gl/sch0OwHKEx chief dismisses conflict-of-interest charge
JOYCE HO – Nikkei
Hong Kong Exchanges & Clearing’s chief executive strongly denied claims that the bourse operator had a conflict of interest in its dual roles as regulator and facilitator of stock listings.
goo.gl/XUSqPXNasdaq Dubai launches trade in single-stock futures
By Andrew Torchia – Reuters
The Nasdaq Dubai exchange began trading single-stock futures on shares in some of the United Arab Emirates’ biggest companies on Thursday, a step towards drawing fresh money into UAE equity markets.
goo.gl/W0ZuddPoliticsDonald Trump’s Tremendous Outflow Of Jobs To Mexico Is Actually None, Not One
Tim Worstall – Forbes
Donald Trump is again running with his line that trade deals have led to some “tremendous outflow” of jobs from the US. As if a trade deal means that employers pack up the jobs in boxes and ship them off to foreigners to do. The sad thing about this idea is that so many believe it. And the truth about this idea is that trade doesn’t change the number of jobs in the US at all. Not one whit, not one single iota.
goo.gl/tg25qEDonald Trump and the Mob; His real-estate developments in Atlantic City and New York brought the GOP nominee into regular contact with people who had ties to organized crime; he says he’s ‘the cleanest guy there is’
By MICHAEL ROTHFELD and ALEXANDRA BERZON – WSJ
In 1981, a young and ambitious Donald Trump sat down with federal agents and discussed his calculation in entering the mob-infested world of Atlantic City casinos.
goo.gl/BfT9GZHere’s how a billionaire really uses political money to make social change
Hanna Kozlowska – Quartz
Billionaire philanthropist George Soros is the ultimate right wing bogeyman. He’s been said to be a Nazi conspirator, a secret global drug lord, behind Black Lives Matter and the Ferguson protests in 2014—generally, a lefty puppet-master who pulls all the strings. But the liberal magnate’s real “conspiracy”—quietly working to change key officials in the broken American criminal justice system—shows that political action for social change doesn’t require an elaborate international cabal.
goo.gl/47eGwdWant to understand Donald Trump’s rise in the GOP? Look to the financial crisis — of 1873
Ryan Cooper – TheWeek.com
Donald Trump will probably mark a turning point in the ideological history of the Republican Party. A party that since 1964 has been all about free trade and tearing up the welfare state has nominated as its presidential candidate a trade skeptic who promises to protect Social Security and Medicare.
goo.gl/6jPzcLInvesting and TradingIndexing Is Capitalism at Its Best
By Clifford Scott Asness – Bloomberg
A recent Sanford Bernstein research report titled “The Silent Road to Serfdom: Why Passive Investing is Worse Than Marxism,” besides starting quite the kerfuffle in the financial world, raises some eternal questions. For instance, if you stumbled upon any random group of finance Ph.D. students at 2 a.m. in the student lounge having finished all the Michelob Light they lifted off the MBA mixer, there’s a good chance you would hear one of them say, “Hey, if everyone indexed what would happen?” and then witness a long but ultimately unproductive discussion on the topic.
/goo.gl/L3AHPFAn Unusual Thing Happened In August: Only Energy Rose
Jodie Gunzberg – Indexology
For the first time since March 2008, energy was the only positive sector in the S&P GSCI for the month in Aug. Energy gained 6.2%, while agriculture, industrial metals, livestock and precious metals lost 5.7%, 3.2%, 0.4% and -4.0%, respectively. Not only is this the first month in over 8 years for energy to rise alone, but it has only happened 9 times since energy entered the index in Jan. 1983.
goo.gl/S0udfDAsia steals FX market share from UK
Hayley McDowell – The Trade
Tokyo, Singapore and Hong Kong’s foreign exchange (FX) market share has surged over the last three years, as the UK suffers its first dip in a decade.
goo.gl/4Kh34nDow Chemical’s 1-in-1000 Stock Action Works in Warren Buffett’s Favor
Anupreeta Das – WSJ
Dow Chemical shares are showing clear signs of tinkering, according to an analysis by a Yale University professor. The shares come within cents of an important threshold – $53.72 – pretty often. But they’ve closed above that level so rarely that there’s less than a one-in-a-thousand chance that ?it’s happening randomly, according to the analysis. If the stock closes above $53.72 enough times, Dow has the option to buy back $3 billion worth of preferred shares from Warren Buffett’s Berkshire Hathaway. But as the Journal noted in a front-page story last week, people familiar with the matter say that executives at Dow believe someone is selling its stock short — or betting that its price will fall — to keep it from rising above $53.72.
goo.gl/jGlHBQThe world’s biggest hedge fund expects a bust in China
Rachael Levy – Business Insider
The world’s biggest hedge fund firm thinks that China is preparing for a bust.
goo.gl/O72RdNOpinion: Your money-market fund is about to undergo some changes
By Chuck Jaffe – MarketWatch
Peter in Weymouth, Mass., hadn’t looked closely at his retirement plan for a while, so he was surprised to see a fund he didn’t recognize: a money-market fund in which he holds cash whenever the market makes him nervous had morphed into a “government cash reserves fund.”
goo.gl/pBy93xPenny for Your Stocks?
Michael P. Regan – Bloomberg
It’s amazing how ridiculous the story of an over-the-counter stock has to get before it starts making headlines in the financial press.
/goo.gl/ejePpAInvestors warm to US financial stocks; US financial stocks draw $1.4bn of flows as expectations grow of Federal Reserve rate rise
by: Eric Platt in New York – Ft
Investors piled into US bank stocks in the final week of August at the fastest pace in almost a year, propelled by firming expectations that the Federal Reserve will increase interest rates this year.
/goo.gl/Uev9X6Vanguard attracts nearly $200bn this year; Investment group on track to smash 2015’s record inflows
by: Robin Wigglesworth and Stephen Foley in New York – Ft
Vanguard has attracted nearly $200bn of money already this year, putting the investment group on track to smash last year’s record inflows and underscoring the big shift towards passive asset management.
/goo.gl/1UJjmKGoldman: The Fed Might Have a New, Big Idea; The natural rate of interest has been lower than previously thought.
Tracy Alloway, Luke Kawa – Bloomberg
The Death Star is a fictional space station popularized by the Star Wars franchise.
goo.gl/sOuCffBill Gross says negative interest rates are nothing but liabilities
By Rachel Koning Beals – MarketWatch
Call bond-market veteran Bill Gross a “broken watch.” He doesn’t care. His gripe about negative interest rates and a flood of debt, which he considers a risk, not a fix, for a global economy that’s still limping out of the financial crisis, is challenged daily by resilient demand for the bonds he’s bearish on. But even if being “right” eventually is a hard sell right now, he’s not backing down, Gross said in his latest monthly commentary.
goo.gl/sKGBuuInstitutionsCan US money funds rely on French banks for repo liquidity?
Kris Devasabai – Risk.net
A strange phenomenon has been prevalent recently in the US repo market. At the start of every quarter, a handful of foreign dealers – led by the three big French banks – begin to massively expand their repo books, with outstanding balances reaching a peak about midway through the cycle. As quarter-end approaches, these firms shed up to 80% of their repo balances to finish the reporting period roughly where they started. A quirk in the leverage ratio rules explains these undulating repo balances. While US banks are required to calculate their leverage exposures on a daily basis, French banks do so at quarter-end. This allows them to run vast overnight repo books, at least until the end of the quarter, when their regulatory filings come due.
goo.gl/RJtgSsWill Wall Street file suit over the Fed’s stress tests?
By Kevin Dugan – NY Post
Citi predicts a Trump presidency would trigger financial crisis
Wall Street wants some stress relief. Big banks and their trade groups are weighing a possible legal challenge against the Federal Reserve’s annual “stress tests,” which is supposed to assess how well the financial firms would weather another financial crisis, according to a report.
goo.gl/jsxDP2Vanguard attracts nearly $200bn this year
Robin Wigglesworth and Stephen Foley – Financial Times
Vanguard has attracted nearly $200bn of money already this year, putting the investment group on track to smash last year’s record inflows and underscoring the big shift towards passive asset management. The poor performance of many actively managed mutual funds, coupled with their expense, has accelerated the trend towards passive investment strategies that merely aim to cheaply mimic the performance of markets rather than beat them.
goo.gl/DPdZbaA Top Investment Banker Actually Took All His Paternity Leave for Once
Julie Steinberg – WSJ
Sam Kendall was starting a family for the second time, and he wanted this time around to be different. The new head of investment banking for Asia Pacific at UBS Group AG hoped to take extended paternity leave to care for the twins he and his wife were expecting, and was nervous about broaching the subject, Mr. Kendall, 45, said this week in an interview.
goo.gl/zhfcNMIs the ECB Buying Bonds From Itself?
Mike Bird – WSJ
The European Central Bank may be buying bonds from itself as it runs out of debt to sate its massive quantitative easing program. That’s according to economists at Jefferies. The ECB’s bond-buying program has been running for nearly 18 months, and investors and analysts have often asked whether the central bank is running out of debt to buy. Now, the ECB may be indirectly buying bonds from itself, according to Marchel Alexandrovich and David Owen at Jefferies, in a research note published Thursday.
goo.gl/nUZfeKJapan’s megabanks join Saudi Aramco IPO scrum
Leo Lewis – Financial Times
Japan’s three megabanks have joined the global tussle for a slice of Saudi Aramco’s expected $100bn initial public offering, inking deals to forge closer business ties with the state-run oil producer. The banks are eyeing increased business in Saudi Arabia as Aramco diversifies its portfolio into alternative energy and Japanese companies race to provide technology and services.
goo.gl/55RTRiEurope’s Broken Banks Need the Urge to Merge
By Mark Gilbert – Bloomberg
The recent flurry of excitement at the idea that Germany’s Deutsche Bank and Commerzbank contemplated a merger reinforces the view that the European finance industry is ripe for consolidation. Banking leaders themselves talk about the need for mergers in an overbanked market, but no-one among the bigger banks seems to want to go first. If something doesn’t change soon, Europe won’t have a banking industry worthy of the name.
/goo.gl/rI437MGood Technology shareholders sue JPMorgan over fiduciary duty
Former shareholders of Good Technology Corp, a mobile software maker, are suing JPMorgan Chase & Co (JPM.N) for breach of fiduciary duty, according to a lawsuit filed on Thursday.
goo.gl/GVGfWDFintechTrax Launches MiFID Instrument Reference Data Service
Joanna Wright – WatersTechnology
Trax, a provider of capital markets data, trade-matching and regulatory reporting services, has launched an instrument reference data service. The Trax MiFID List is intended to help firms overcome the regulatory challenge of correctly identifying reportable instruments under the Markets in Financial Instruments Directive (MiFID I). The service provides a view on MiFID I reportable instruments and an indication of eligibility for the upcoming revised directive, known as MiFID II.
goo.gl/uyYpwuHow Netflix helped create a pair of hedge fund stars
Nathan McAlone – Business Insider
A decade ago, Netflix held a contest to see who could come up with the best algorithm to improve its recommendation system. The prize was $1 million, and it became an obsession of many data gurus — one that was as much about the solving the problem as getting the cash.
One of these would-be prizewinners was Jaffray Woodriff, a quantitative hedge funder who found himself pulling eight all-nighters to try to climb to fourth place on the algorithm leaderboard, he told Bloomberg.RegulationCFTC to Hold an Open Commission Meeting on September 8th
U.S. Commodity Futures Trading Commission (Commission) Chairman Tim Massad announced today that the Commission will hold an open meeting on Thursday, September 8, 2016 at 10 a.m. to consider the following:
Final Rule – System Safeguards Testing Requirements for Derivatives Clearing Organizations (Division of Clearing and Risk)
Final Rule – System Safeguards Testing Requirements (Division of Market Oversight)
Comparability Determination for Japan Uncleared Swap Margin Rules for Substituted Compliance Purposes
jlne.ws/2bO6PkbCFTC Issues No-Action Letter To Swap Dealers To Extend Collateral Rule Deadline Due To Limitations With Custodial Accounts – Swap Dealers Given Until October 3rd To Comply
The U.S. Commodity Futures Trading Commission’s (CFTC) Division of Swap Dealer and Intermediary Oversight (DSIO) today issued a time-limited, no-action letter stating that it will not recommend an enforcement action against a swap dealer subject to the September 1, 2016 compliance date for the CFTC’s uncleared swap margin rules, subject to certain conditions, for failing to fully comply with the custodial arrangement requirements of CFTC regulation 23.157 prior to October 3, 2016. Due to certain practical and technical limitations, DSIO believes it is appropriate to provide this relief when a swap dealer is making diligent, good faith implementation efforts in this period of transition.
goo.gl/varbR6Statement Of CFTC Chairman Timothy Massad Regarding 30 Day No-Action Relief From Compliance With Custodial Arrangement Requirements Under CFTC Uncleared Swap Margin Rules
Today is the first compliance date for our rules requiring margin for uncleared swaps, which generally covers transactions between swap dealers. CFTC staff has been made aware that some dealers have not been able to complete all documentation required to comply with the custodial arrangements required by CFTC rules, due to the limited number of providers of such services and the volume of custodial agreements that market participants are requesting. While it is staff’s understanding that this situation has improved in the last few days,? and that the largest dealers may no longer face significant issues, staff has heard that smaller firms or foreign firms may not have been able to complete all arrangements or test these new facilities.
goo.gl/KkiuxyFederal Court in Nevada Orders My Global Leverage, LLC and Toney Blondo Eggleston to Pay More than $1.4 Million in Restitution and a Monetary Penalty for Engaging in Illegal, Off-Exchange Precious Metals Transactions
The Court’s Order requires MGL and Eggleston, jointly and severally, to pay $692,488 in restitution and a $773,040 civil monetary penalty. The Order also imposes permanent trading, solicitation and registration bans against MGL and Eggleston, and a permanent injunction that prohibits them from engaging in illegal, off-exchange precious metals transactions.
jlne.ws/2bO6XAiCFTC Wins Fraud Trial against Florida-Based Precious Metals Traders Robert Escobio, Southern Trust Metals, and Loreley Overseas Corporation
The Judgment permanently enjoins and prohibits Escobio and the two companies from trading and orders them to pay restitution in the amount of $1,543,892 and a civil penalty of $254,919.66 for an illegal precious metals scheme. The Judgment also orders Southern Trust and Escobio to pay additional restitution of $559,725 and an additional penalty of $120,112.33 for an unregistered futures scheme.
jlne.ws/2cua9VrSEC Charges Alabama Attorney and His Companies in Purported Waste-To-Energy Ventures
The Securities and Exchange Commission today charged Alabama attorney Donald Watkins and companies he controls with defrauding professional athletes and other investors out of millions of dollars, much of which he spent on his girlfriend and to cover personal expenses like alimony, past due taxes and credit card bills.
jlne.ws/2cuaEPmSebi tightens risk management for commodity derivatives
The Securities and Exchange Board of India (Sebi) announced a series of measures for strengthening and upgrading of risk management in commodity derivatives markets.
Some new concepts were also introduced to deal with liquidity problems in stressed situations. For instance, up to two days of risk coverage by initial margin, concentration margin, tools to regain matched book and ‘default waterfall’. An exchange’s accountability in a default has also been increased, to match those at equity exchanges.
goo.gl/Y7H0rgRegionsIsrael Courts Foreign Money in Effort to Become Gas Exporter
Israel’s energy minister laid on the charm as he spoke to a few dozen oil executives, contractors and analysts in a crowded hotel conference room about the country’s natural gas prospects. He crowed that the country could one day be a top supplier to Europe, while explaining how multinationals in other industries were already enamored of Israel.
goo.gl/qpyuJsPutin Says Russia’s Self-Sufficiency Lets It Skip Bond Dash
Ksenia Galouchko, Olga Tanas, Ilya Arkhipov – Bloomberg
No need for central bank to rush boosting currency reserves; President says he never gives directives to Bank of Russia
President Vladimir Putin said Russia has the fiscal health to finance its budget without joining the biggest rush to foreign debt markets by developing nations in three years.
goo.gl/3KCh1nChina: the former EM darling; Emerging market investors begin to retreat from China as fears grow over its debt pile
by: James Kynge – FT
For most of the last 15 years, China was a darling for emerging market investors as its demand for commodities lifted the economic fortunes of countries in Latin America, Africa and Asia. But now, as China struggles with the hangover from its debt-fuelled boom, fund managers are increasingly shunning Asia’s giant.
/goo.gl/TO6Q4uMexico’s Peña Nieto suffers PR disaster from Trump meeting; Mexican president’s meeting with Republican candidate backfires
by Jude Webber in Mexico City – FT
Mexico’s President Enrique Peña Nieto scrambled on Thursday to control the fallout from a meeting with Donald Trump that left him looking like a pawn in the US Republican presidential candidate’s campaign over illegal immigration.
/goo.gl/S1RuXPMiscellaneousEconomists Profit by Giving Things Away
By Justin Fox
Economics is the most influential social science, and has been for a long time. Why is that? A decade-and-a-half ago, Stanford University economist Edward Lazear offered a famous answer: