Not Everyone’s in Florida
Jon’s here, too. John wanted to bring me to Florida, but that’s a pretty long haul from up here in the middle of nowhere. I did make it as far as the airport in Tromsø yesterday, a 20-minute flight from my home town here, but as that’s about as long as I’m willing to sit in an airplane seat these days, I turned around and came home again. Anyway, I heard that the folks in the States had real winter, and we haven’t seen that critter in weeks, here, so I think I’m better off in the arctic all ’round.
Wake and Memorial Service for Bob Ray
As we reported last week, Robert D. Ray, chief executive officer of CME Europe and former executive at CME Group and CBOT, passed away last Thursday. We have received some information about the services for him, for those of you who inquired about attending. Take the link below to the JLN blog for the times and locations.
CME Group Receives Regulatory Approval For Launch Of Its European Exchange
CME Group, the world’s leading and most diverse derivatives marketplace, announced today it has received approval from the United Kingdom’s Financial Conduct Authority (FCA) for a London-based derivatives exchange. CME Europe Ltd will be a Recognised Investment Exchange and will launch on 27 April.
***JM: Looking forward to the eventual introduction of reindeer futures; should stabilize the market up here considerably.
Facing up to the challenges of the new world order
David Setters – infoNet
Trading Technologies (TT) is certainly a survivor in a market which has seen a contraction from about 20 ISVs servicing the futures markets at the turn of the millennium, to probably no more than six truly independent suppliers around today, according to Steve Stewart, Managing Director, Europe, Trading Technologies. And although having fewer ISVs around is an obvious advantage, as Stewart himself points out, many banks continue to develop their own screens and that constitutes much of the ISV’s competition. The main challenge of recent years, however, has been the regulatory change agenda.
***JM: You’ll find this article on page 41 of the PDF in the link above.
Virtu Filing Shines Light on High-Frequency Trading
Sam Mamudi – Bloomberg
High-frequency trading, a business that has been shrouded in secrecy because its biggest firms were private, is coming out of the dark.
***JM: And as it emerges into the light… aw, it’s just a market-making company. Where are the demons and screaming and scary organ music?
FIA Volume Report: Global Futures And Options Volume Rose 2.1% To 21.64 Billion In 2013
FIA today released its annual report on global trends in the trading of futures and options. According to statistics gathered by FIA from 84 exchanges worldwide, 21.64 billion futures and options contracts were traded in 2013, an increase of 2.1% from the previous year, but still well below the number of contracts traded in 2011 and 2010.
Introducing KC Hard Red Winter Wheat
On Sunday, March 23, 2014 (trade date March 24, 2014) participants in the KC Hard Red Winter (HRW) Wheat market will have a new tool for fine tuning their trading strategies. The Mini-sized KC HRW Wheat futures contract joins the suite of Corn, Soybean and Chicago SRW Mini-sized futures
Capacity constraints top hedge fund investor agenda
Harriet Agnew – Financial News
Hedge fund investors anticipate that capacity constraints will develop as managers close to new money, return cash or transform into family offices to escape regulation, according to an annual survey from Credit Suisse.
***JM: A pity we can’t start new hedge funds. Wait, what?
Experts to Discuss Options Benchmark Performance on March 17 in FL
Matt Moran – CBOE Options Hub
On March 17th at the 30th Annual CBOE Risk Management Conference in Florida, I will participate in a panel discussion on Historical Performance of Options-Related Strategies with these three investment management experts
Live Webinar: Becoming a Smarter Trader: The Structure of the Sugar, Coffee, and OJ Markets
Wednesday, March 12 | Time: 12:00 p.m. ET / 5:00 p.m GMT
Please join ICE and Interactive Brokers as they present Judy Ganes, founder and president, J. Ganes Consulting LLC, veteran analyst of the soft commodities and sought-out expert in this field, discussing the supply side of the coffee, sugar and OJ markets. A key to understanding many commodities markets is getting a handle on the structure of producers and users and how the dynamics between these two groups may influence market action.
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NYSE, Nasdaq Join to Push for Trading Rule
Longtime rivals Nasdaq OMX Group Inc. and NYSE Euronext are joining forces in a bid to reclaim trading volumes from smaller competitors, according to people familiar with the matter.
London Stock Exchange pushes case for expansion into Australia
THE boss of the London Stock Exchange Group has directly lobbied the federal government over the company’s plans to expand its business in the Australian market.
SEC Said to Probe Whether Forex Rigging Distorted Options
Keri Geiger and Silla Brush – Bloomberg
The U.S. Securities and Exchange Commission is investigating whether currency traders at the world’s biggest banks distorted prices for options and exchange-traded funds by rigging benchmark foreign-exchange rates, according to two people with knowledge of the matter.
Hong Kong’s market watchdog streamlines push for more oversight
Paul J Davies in Hong Kong – FT.com
Hong Kong’s market watchdog is boosting its corporate investigations staff by more than 10 per cent and bringing in litigators to speed up probes as it moves to improve its monitoring of company behaviour.
TIMELINE-The FX fixing scandal
Bank of England (BoE) governor Mark Carney faces a grilling from UK lawmakers on Tuesday about what Bank officials knew about allegations that currency traders colluded to manipulate key exchange rates.
Sharply Criticized by Government, Head of the Central Bank of Cyprus Resigns
LIZ ALDERMAN – NYTimes.com
The central bank chief of financially plagued Cyprus resigned Monday, following political tensions with the Cypriot government and an investigation into his role in the 10 billion euro international bailout for the island last year.
Virtu IPO to value Viola stake at $2bn
Arash Massoudi in New York – FT.com
Few outside Wall Street have heard of Virtu Financial, the proprietary high-frequency trading firm, and its founder, Vincent Viola. But the company and its low-profile chairman are preparing to make a very public splash.
Lloyds Trader Said to Tip Off BP to $500 Million FX Deal
Gavin Finch, Ambereen Choudhury and Liam Vaughan – Bloomberg
A senior currency dealer at Lloyds Banking Group Plc (LLOY) shared details of a pending order by his firm with a trader at another company to the potential detriment of the bank, according to four people with knowledge of the matter.
ECB to probe EUR3.7tn of eurozone bank assets
Alice Ross in Frankfurt – FT.com
The European Central Bank is set to probe EUR3.7tn worth of assets from the largest lenders in the eurozone as it embarks on a fresh phase of its asset quality review that will seek to shine a light into the murkier areas of banks’ balance sheets.
CFTC Announces that Bloomberg SEF LLC Available-to-Trade Determinations Are Self-Certified
The Commodity Futures Trading Commission’s Division of Market Oversight today announced that Bloomberg SEF LLC’s self-certification of available-to-trade determinations for certain interest rate swap and credit default swap contracts are self-certified.
U.S. Commodity Futures Trading Commission and Financial Services Agency of Japan Sign Memorandum of Cooperation to Enhance Supervision of Cross-Border Regulated Entities
Today, leaders of the U.S. Commodity Futures Trading Commission and the Financial Services Agency of Japan signed a Memorandum of Cooperation regarding cooperation and the exchange of information in the supervision and oversight of regulated entities that operate on a cross-border basis in the United States and Japan.
CFTC Staff Issues an Extension of Time-Limited No-Action Relief to Eurex Clearing
The U.S. Commodity Futures Trading Commission’s Division of Clearing and Risk today issued an extension of time-limited no-action relief to Eurex Clearing AG.
SEC Launches Enforcement Cooperation Initiative for Municipal Issuers and Underwriters
The Securities and Exchange Commission today announced a new cooperation initiative out of its Enforcement Division to encourage issuers and underwriters of municipal securities to self-report certain violations of the federal securities laws rather than wait for their violations to be detected.
Central Bank Regulations: What You Need to Know Now
Sinan Baskan – Wall Street & Technology
Recent regulatory changes should improve transparency and liquidity. But there remain a lot of uncertainties.
EC ‘assassinated’ benchmark reform
Anish Puaar – Financial News
The European Commission has tried to “assassinate” progress on new rules on financial benchmarks, according to the MEP leading the European Parliament talks on the reform.
IOSCO Report Compares And Analyses Prudential Standards In The Securities Sector
Exchanges & Trading Facilities
MexDer announces the launch of a new 10-Year M Bono Future Contract
The Mexican Derivatives Exchange today announced the launch of a new instrument, the 10-Year Federal Government Bonds Futures. The Specific Bond Future is an innovative product that has the most liquid Bond in the Mexican fixed income market as underlying, with approximately 25% of the total daily volume.
Nordic Derivatives Exchange considers expansion in Europe
Vita Millers – Risk.net
In a little more than 10 years, the Nordic Derivatives Exchange has become the most important in the region for trading listed structured products.
Monthly Summary Bulgarian Stock Exchange February 2014
TOM Insight February 2014
Hedge Funds & Managed Futures
Dan McCrum | FT Alphaville
February was a good month for the hedge funds, erasing January losses and then some, according to HFR. The average hedge fund was up 2.1 per cent in February, to leave it up 1.5 per cent for 2014 so far.
Hedge funds look to put strategies into ETFs to lure more investors
More client-hungry hedge fund managers are looking to put their investment strategies to work in exchange-traded funds, a move that could exponentially expand their pool of investors but requires them to slash investment management fees.
Investors closely monitoring Pimco after internal strife
Several U.S. institutional investors said they are closely monitoring the developments at Pimco, the world’s largest bond firm, in the wake of Mohamed El-Erian’s abrupt resignation as CEO and ensuing acrimony between him and co-founder Bill Gross.
BlackRock Hires New Head of China Equities
BlackRock, the world’s largest asset-management company, said on Monday that it had hired Helen Zhu as a managing director and head of its China equities business.
Ex-Olympian’s Hedge Fund Punctured by Japan
Rob Copeland – MoneyBeat – WSJ
A former Olympic fencer’s hedge fund may have found its foil. The $1.5 billion Balestra Capital Partners, L.P., started by ex-Olympian Jim Melcher, lost more than 6% last month pressing bullish bets on Japanese stocks and against the yen, according to investor communications viewed by MoneyBeat.
Principal Global Investors CEO says firm seeking to acquire boutique asset managers
The head of New York-based Principal Global Investors said on Tuesday the $311 billion fund manager is looking into buying boutique asset management firms that invest in emerging markets and real estate to expand its portfolio of assets
HSBC kicks off EUR2bn buyout fund disposal
Alec Macfarlane and Dan Dunkley – Financial News
HSBC is to sell as much as EUR2 billion of private equity fund stakes on the secondaries market after appointing advisers to dispose of the holdings, according to two people familiar with the situation.
JP Morgan: insurers will outsource alternative funds
Joe McGrath in Edinburgh – Financial News
JP Morgan Asset Management is preparing for a wave of business from insurers seeking to outsource investment in specialist areas such as infrastructure, private equity and real estate.
Morgan Stanley adviser John Travis joins Cordet Capital Partners
Richard Partington – Financial News
A senior capital markets adviser at Morgan Stanley in London has left the bank to join a private debt fund manager run by a former colleague.
iSTOXX Efficient Capital Managed Futures 20 Index – February 2014 – Monthly Report & Commentary
Banks & Brokers
Berkowitz: Treasury’s Rationale for Fannie Bailout Fix Is ‘Nonsense’
Nick Timiraos – MoneyBeat – WSJ
Bruce Berkowitz made clear in letters to the boards of Fannie Mae and Freddie Mac two weeks ago that he believes the companies should be run for the benefit of private shareholders and not just the government.
Lehman wisdom from beyond the grave
There are some benefits to having an incredibly untidy desk. While conscious that we had not tidied up for a while, even Euromoney was taken aback by what we found under a pile of papers in the office: Lehman Brothers’ Outlook for the ABS market, published in February 2007. Given what happened just months later, the document makes for rather eerie reading.
Slump in trading signals more cuts
Tim Cave and Matt Turner – Financial News
A fall in trading in the first quarter has raised concerns among senior industry figures that banks will be unable to make up lost ground later in the year, potentially leading to further restructuring at investment banks’ markets units.
Clearing & Settlement
LCH.Clearnet’s SwapClear Expands Compression Offering
LCH.Clearnet Limited, the global clearing house, announced today it has expanded its compression offering to include multilateral compression via SwapClear, its market-leading interest rate derivatives clearing service. Multi compression is in addition to SwapClear’s existing Solo and Duo compression capabilities and enables multiple members to simultaneously compress their trades with each other.
Clearstream To Roll Out The Bilateral Collateral Management Service OTC Collateral
OTC Collateral Will Strengthen The Over-The-Counter Processing Capabilities Of The Global Liquidity Hub – All Bilateral Collateral Management Activities Are In Scope Such As Cleared And Uncleared Derivatives, Bilateral Repo, Securities Lending And Dedicated Collateral Agreements
Long-delayed settlements complicate op risk capital models
Marcelo Cruz – Risk.net
Regulators are seeking higher op risk capital levels due to the impact of events several years ago – which is difficult to explain to bank boards
CME Group Clearing: Additional Weekly Options for Emini NASDAQ 100 and NASDAQ 100
CME Group Clearing: USD Interest Rate Swap Futures – Delivery Process, March 2014
CME Group Clearing: March 2014 Currency Delivery Reminders
Indexes & Products
Thomson Reuters Sets Up Subsidiary to Beef Up Governance of Financial Benchmarks
Ivy Schmerken – Wall Street & Technology
Regulated by the U.K.’s Financial Conduct Authority, the new subsidiary will house Thomson Reuters’ portfolio of 160 global benchmarks, as it prepares for stricter global regulations.
Change of Component Issues for RN Prime Index
[TSE] ETF/ETN Monthly Report for Feb 2014
Deutsche Börse: First ETF With An International Security Structure Launched On Xetra – New iShares ETF Tracks EURO STOXX 50 Ex-Financials Index
OptionsCity Updates its Futures and Options Trading Platform
Jake Thomases – WatersTechnology
OptionsCity Software, a Chicago-based provider of futures and options trading solutions, has released version 5.0 of its flagship trading and market-making platform, Metro, designed to better manage risk.
Cinnober to Include Azul’s Innovative Zing Runtime in TRADExpress
Cinnober and Azul Systems Inc., the award-winning leader in Java runtime scalability, today announced a partnership under which Cinnober will offer Zing, Azul’s high performance runtime for Java, with its TRADExpress solutions.
Azul Systems Launches ReadyNow!, Solving Java’s “Warm-Up” Problem
Unique New Technology Included In Zing That Ensures Peak System Performance At Market Open And During Other Critical Times
Interactive Data Adds Bloomberg Open Symbology
Michael Shashoua – WatersTechnology
The pricing and data services company joins a growing number of providers offering Bloomberg’s securities identification system
RTS launches RTD Tango Trader 2.0 with Chart Analytics Package and Introduction of Algorithmic Development Services
Virtu Reveals CFTC Probe Into Trading Incentives From Exchanges
Sam Mamudi – Businessweek
Virtu Financial Inc., the automated trader that today released plans for selling stock, said U.S. derivatives regulators are investigating its trading practices.
Federal Court in Illinois Imposes over $3.5 Million in Sanctions against Dimitry Vishnevetsky and his Company, Oxford Capital, for Orchestrating Commodity Fraud Schemes and Misappropriation
The U.S. Commodity Futures Trading Commission obtained a federal court Order requiring Defendants Dimitry Vishnevetsky formerly of Chicago, Illinois, and his company, Oxford Capital, LLC to pay a civil monetary penalty of $1,910,982 and restitution for defrauded customers totaling $1,608,327.
Weak trial witnesses hinder a more aggressive SEC
As the U.S. Securities and Exchange Commission seeks to become a more formidable force in the courtroom, a string of trial defeats in the past six months has exposed a weak spot: witness testimony.
SIX Exchange Regulation: Weatherford International Ltd. fined by Sanction Commission
Environmental & Energy
A Carbon Tax to Rule Them All
Brendon Steele – TriplePundit
Here’s the beginning of a joke: Citizens Climate Lobby, ExxonMobil, climate scientist James Hansen, and a conservative Heartland Institute spin-off walk into a bar. No, a bar fight doesn’t erupt. Instead, what do they agree on when they walk out?
Not many realize, but they already agree on a carbon tax shift.
‘Faster reform’ could see EU carbon soar
Reuters (via Climate Spectator)
Reforming the European Union’s Emissions Trading System (ETS) before 2021 could add almost 40 per cent to average European carbon prices, Thomson Reuters Point Carbon analysts said on Friday.
Gas sector battles coal power over carbon price floor
Will Nichols – BusinessGreen
Three of the largest independent gas power suppliers have warned the UK could face blackouts if the Chancellor freezes the government’s main carbon tax in next week’s Budget.
SGX and Dalian Commodity Exchange Seal Collaboration with MOU
Singapore Exchange and Dalian Commodity Exchange have signed a memorandum of understanding to collaborate on efforts to promote greater understanding and explore initiatives in the development of commodities markets in both China and Singapore. The two exchanges inked the MOU in Singapore on Friday, 7 March 2014.
China to launch private bank pilot program
China will launch pilot programs testing the development of privately owned banks in Tianjin, Shanghai, Zhejiang and Guangdong, the country’s bank regulator Shang Fulin said on Tuesday.
Société Générale Bets on Asian Investment-Banking Revival
HONG KONG—Société Générale plans to expand its Asian investment-banking business, in a rare example of a European lender growing in the region just two years since the euro-zone debt crisis forced them to pull back.
HKEx: Admission Of HK Electric Investments And HK Electric Investments Ltd To List Of Designated Securities For Short Selling
The Stock Exchange of Hong Kong Limited, a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited, announces that with effect from 18 March 2014, HK Electric Investments and HK Electric Investments Ltd will be admitted to the list of designated securities eligible for short selling.
Japan Commodity Clearing House SPAN Parameter Update effective March 17
SGX lists CapitaMall Trust’s seven-year retail bonds
[OSE] Approval of Trading Qualification in connection with the Integration of Derivatives Markets
HKFE Announces Revised Margins for CITIC Pacific Futures
Hong Kong’s Securities And Futures Commission Bans Lam Chin Man For 15 months
Egyptian Exchange: Egypt’s Minister Of Trade, Industry And Investment And The Minster Of Education Open The Trading Session Celebrating Global Money Week In Egypt.
Nigerian Bourse Set To Expand Product Offerings
Amman Stock Exchange Fifteenth General Assembly Meeting
Tel Aviv Stock Exchange: Composition Of Tel Div Index As Of March 17th, 2014
FINRA Foundation Study Finds Millennials Struggle Financially
The FINRA Investor Education Foundation’s new study, The Financial Capability of Young Adults—A Generational View reveals that millennials display low levels of financial literacy, engage in problematic financial behaviors and express concerns about their debt.
U.S. Companies Cling to Writing Paper Checks
On Saturdays around 7 a.m., before he goes to the gym, Ken Goldman sits on the couch with his laptop and pays household bills online. It takes about five to 10 minutes. On weekdays, however, he goes to work at Black Duck Software Inc., an international consulting firm with $50 million in sales. Twice a month, a staff accountant comes to his office with a stack of about 50 checks and it takes Mr. Goldman about half an hour to sign…
***JM: I remember being puzzled in the late 1990s at the financial services company where I worked using hand-carried backup tapes to move data between mainframes because they didn’t have a network. A few years later, my Norwegian wife told me the USA was “cute” because we still wrote paper checks. Now… well, looks like not much has changed. Time to go into the quill-pen business, maybe.