First Read

CFTC Commissioner Sharon Bowen Announces Legal and Policy Team
U.S. Commodity Futures Trading Commission (CFTC) Commissioner Sharon Bowen today announced her legal and policy staff. Today, Commissioner Bowen named Eric Juzenas Principal Adviser; Petal Walker Chief Counsel and Justin Slaughter Chief Policy Advisor and Special Counsel.
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***** Congratulations to the new Commissioner Bowen Team.

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Former N.Y.S.E. Chief Niederauer to Join Upstart Broker
William Alden – Dealbook – NY Times
Duncan L. Niederauer, who provided a gateway to the public markets as head of the New York Stock Exchange, has started a new job in helping companies that want to stay private.
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***** I wanted to start a firm just like this five years ago. It is an even better idea now.

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‘Spoofing,’ a New Crime With a Catchy Name
Peter J. Henning – Dealbook – NY Times
Giving a crime a catchy moniker is a good way to get attention when prosecutors pursue a new form of misconduct. There is, for instance, a type of money laundering called “smurfing,” named for the cute blue cartoon characters, that involves runners for a drug organization making small cash deposits at various banks to avoid the currency transaction reporting rules.
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****** The criminalization of market activity will have a very chilling effect on our capital and commodity markets. It will have a disastrous impact on the reliability of price discovery and will lead to even bigger shocks and crises in the markets in the future. But hey, now the regulators can say they did something.

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Rocktoberfest from A Leg to Stand On is close at hand
JohnLothianNews.com
A Leg To Stand On is a non-profit that provides free prosthetic limbs and corrective surgery to children in developing countries who have lost their limbs in traumatic accidents or suffer from congenital limb disabilities. ALTSO’s annual fundraising benefit, Rocktoberfest Chicago, is moving into its 3rd year after having originated 11 years ago in New York. Rocktoberfest unites leaders from the finance industry for a night of Rock & Roll music performed by industry professionals. Rocktoberfest Chicago will be held on October 8th at City Winery. Hedgefund Rocktoberfest in New York will be on October 22 at Capitale.

Watch the video »

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Cinnober Chosen By NYSE Regulation As Technology Provider
NYSE Group has announced NYSE Regulation will directly perform the market surveillance, investigation and enforcement functions for NYSE Group’s three equities exchanges and two options exchanges upon the expiration of the contract with the Financial Industry Regulation Authority (FINRA) on December 31, 2015. As an important step in expanding the market surveillance and enforcement program for NYSE Group’s exchanges, NYSE Regulation has selected Cinnober as technology provider for the development and implementation of the enhanced surveillance system.
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***** Bingo, Bango, Bongo, Cinnober bags another win.

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The Future of Trading: It’s in the Cloud (Part 2 of 2)
Trade Talk – Trading Technologies
This is the second half of a two-part blog post based on my interview with FOW magazine regarding the growing adoption of cloud computing within finance and trading. If you read part one already, thanks for coming back. If you missed it, you can read it here.
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***** Is there a difference between trading in a cloud and an industry turned to dust by overreaching regulations?

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The Return of Fat Fingers
Dr. John Bates – Wall Street & Technology
Recent events demonstrate not enough progress has been made in the monitoring and surveillance of trading — human or machine.
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****** OK, it is time for finger exercises again. And one and two and three.

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Join CQG at FIA Expo in Chicago
Visit CQG at the 30th Annual Futures & Options Expo in Chicago. Stop by booth 326 to view our latest features, including: Web and Charting API; Strategy Manager; Automated Execution; UDS Order Entry; and FX and Equities Trading. Also learn about Continuum’s additional enterprise solutions. We look forward to seeing you there.
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***** See the company where the most interesting man in the futures industry works.

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Sponsored Content
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Lead Stories

NYSE to take back policing duties from Wall Street watchdog
John McCrank – Reuters
NYSE Group said on Monday it would take back the majority of the policing duties for its two U.S. options exchanges and three stock markets, including the New York Stock Exchange, from Wall Street’s self-funded watchdog at the end of 2015.
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CME wins approval to open in Australia
Luke Jeffs – Futures & Options World
CME Group, the Chicago-based exchange giant, is set to launch its first clearing service in Australia, marking the latest sign of growing competition between clearing providers in that country.
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Big Banks Face Another Round of U.S. Charges
Ben Protess and Jessica Silver-Greenberg – Dealbook – NY Times
The Justice Department is preparing a fresh round of attacks on the world’s biggest banks, again questioning Wall Street’s role in a broad array of financial markets.
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Libya’s Sovereign Fund and Goldman Sachs Clash in Court
Jenny Anderson – Dealbook – NY Times
When Catherine McDougall, a lawyer from Allen & Overy, arrived in Tripoli in 2008 to work with the Libyan Investment Authority, the nation’s sovereign wealth fund, she was asked to examine more than $1 billion worth of trades designed by Goldman Sachs. What she discovered stunned her.
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Goldman had ‘inappropriate’ relationship with Libyan fund: court filing
Clare Hutchison – Reuters
A lawyer seconded to the Libyan Investment Authority, which is suing Goldman Sachs over $1 billion of trades that ended up worthless, was “shocked” by the bank’s “inappropriate” relationship with the fund, according to court filings.
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U.S., U.K. Regulators Push to Settle Deutsche Bank Libor Case This Year
Eyk Henning, David Enrich and Jean Eaglesham – WSJ
U.S. and British authorities are hoping to extract major penalties from Deutsche Bank AG in the next few months for alleged manipulation of benchmark interest rates, people familiar with the matter said.
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Paulson Takes the Stand in A.I.G. Trial
Aaron M. Kessler – Dealbook – NY Times
Henry M. Paulson Jr., who was Treasury secretary when the government rescued the American International Group, said on Monday that a bankruptcy of the insurance giant would have been “catastrophic” for the economy, but acknowledged that the terms of the government’s bailout were “punitive.”
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Financial crisis overhaul for credit swaps
Philip Stafford – Financial Times
The credit derivatives market was adjusting on Monday to its biggest overhaul in more than a decade following the introduction of new definitions to incorporate events from the financial crisis.
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Regulatory

Obama Meets Top U.S. Financial Regulators at White House
Victoria McGrane – WSJ
President Barack Obama on Monday urged U.S. financial regulators to keep looking for new ways to rein in excessive risk-taking in the financial sector, possibly through compensation and additional capital rules for the biggest financial firms, a White House spokesman said.
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Lew Says Risk Council Will Consider Changes to SIFI Process
Ian Katz – Bloomberg
U.S. Treasury Secretary Jacob J. Lew said a council of financial regulators will consider changes to how it evaluates companies for systemically important designation.
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ESMA Vacancy Notice – Legal Team Leader
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FINRA Announces Updates Of The Interpretations Of Financial And Operational Rules
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Exchanges & Trading Facilities

Tradeweb sees European profits surge by a quarter
Tim Cave – Financial News
The European arm of Tradeweb, a privately-held US operator of bond and derivatives trading venues, benefited last year from the migration of over-the-counter markets onto electronic platforms as its profits increased by a nearly a quarter.
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Euronext wins SEC backing to open to US traders
Luke Jeffs – Futures & Options World
Euronext plans to open up its European options markets to US traders, marking the latest move by the ambitious Paris-based group to grow its business.
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BATS Global Markets Reports September Volume and Activity
In the U.S., BATS’ U.S. Options market share reached a record 5.8%, up from 5.3% in August and 4.1% one year ago. In Europe, BATS’ European trade reporting facility, BXTR, set a new record with 62.1% market share and more than EUR308.7bn reported.
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September volumes up in Europe but weaker than expected
John Bakie – The Trade
European equity trading volumes saw a smaller than usual seasonal uptick in September, indicating a potential slowdown in the recovery seen since the beginning of the year.
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Irish Stock Exchange Statistics September 2014
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Vienna Stock Exchange Monthly Statistics – September 2014
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Börse Berlin – Number Of Trades Rises
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Ljubljana Stock Exchange: Monthly Statistical Report September 2014
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NYSE Regulation To Perform Market Surveillance, Investigation And Enforcement Program For NYSE Group Exchanges
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Warsaw Stock Exchange Maintains Wig20 Futures Contracts With A Multiplier Of Pln 20
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TMX Group Equity Financing Statistics – September 2014 – Toronto Stock Exchange, TSX Venture Exchange
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TSX Ignite Holds Two Live Events In Alberta On October 8 & 9
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Moscow Exchange: Euro To Be Accepted As Collateral On Derivatives Market
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Hedge Funds & Managed Futures

Venture Firm Thrive Capital Raises Another Fund
Michael J. de la Merced – Dealbook – NY Times
Thrive Capital is a venture capital firm in a hurry. Thrive, which has invested in popular start-ups like Instagram and Warby Parker, plans to announce on Monday that it has raised a new $400 million fund, its third since its founding four years ago.
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Griffin’s Citadel Rose in September as Hedge Funds Fell
Kelly Bit – Bloomberg
Ken Griffin’s $24 billion Citadel LLC posted gains in its main funds in September that beat the average hedge fund as they bet on equities and fixed income.
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Advisers Turn To Private Equity as Hedge Funds Lag
Anna Prior – WSJ
Call it the latest status investment. As hedge funds lose some of their cachet amid poor performance and an overabundance of offerings, some financial advisers are increasingly turning to private equity as a way to diversify clients’ portfolios.
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Ex-Ignis manager Ormiston joins Old Mutual Global Investors
Anna Fedorova – Investment Week
Former Ignis manager Ian Ormiston has joined Old Mutual Global Investors to develop and run a new European Smaller Companies fund.
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Oaktree Capital Chooses Jay Wintrob as C.E.O.
William Alden – Dealbook – NY Times
The Oaktree Capital Group announced a reshuffling of its senior leadership on Monday, including the appointment of Jay Wintrob as chief executive.
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Blackstone to wrap up second energy fund by year’s end above $4bn target
Shasha Dai, Alec Macfarlane and Laura Kreutzer – Financial News
Alternative asset manager Blackstone Group is blazing through fundraising for its second energy-focused private equity fund and is expected to hold a final close by the end of the year above its $4 billion target, said people familiar with the effort.
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Pension funds fear hedging clampdown in Austria
Cecile Sourbes – Risk.net
Austria’s version of the Ucits IV rules has a strict definition of hedging, meaning funds either have to cut their use of derivatives or risk breaching leverage limits. Pension funds could be next in line.
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Banks & Brokers

RJ O’Brien gets fourth trader from UBS
Luke Jeffs – Futures & Options World
US broker RJ O’Brien has hired a fourth senior commodities trader from UBS in the latest sign that smaller firms are looking to fill gaps created by the withdrawal of investment banks.
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Newedge’s Andrew Chart set for UBS
Luke Jeffs – Futures & Options World
UBS is set to hire Andrew Chart, the former senior director of prime clearing at Newedge, marking the latest high-profile move in a resurgent recruitment market.
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UBS France plans to reorganize asset management business
Reuters
UBS’s French arm is planning to restructure its asset management business and is in consultation with unions over possible layoffs, as the Swiss bank continues to sharpen its focus on private banking.
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BNY Mellon to acquire $23bn US fixed income specialist
Anna Fedorova – Investment Week
BNY Mellon is set to acquire US-based fixed income and solutions specialist Cutwater Asset Management, bolstering Insight Investment’s capabilities in the process.
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BGC Partners Hires Trading Tech Veteran as CIO
Ivy Schmerken – Wall Street & Technology
The interdealer broker hired fixed income technology expert Eric Hirschhorn to serve as chief information officer to expand its hybrid and electronic trading businesses.
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Risk-neutral pricing – Hull and White debate Kenyon and Green
John Hull, Alan White, Chris Kenyon, Andrew Green – Risk.net
Lloyds Banking Group’s Chris Kenyon and Andrew Green argued in Risk last month that regulatory-compliant pricing cannot be risk neutral. John Hull and Alan White are not completely convinced
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Consultants fear mis-selling as forex brokers discover new options
Fiona Maxwell – Risk.net
Foreign exchange brokers – which execute spot and forward currency trades with smaller businesses – are now also offering options-based structures to clients in the UK. Consultants say the trades they have seen are complex and worry about the potential for mis-selling.
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Buyers Clamor for Distressed Debt Nobody Wanted: Credit Markets
Alastair Marsh – Bloomberg
They were the bank assets nobody would touch during Europe’s financial crisis. Late payments on credit cards, underwater mortgages and failed loans to small businesses. Now everybody wants them.
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Cantor Targets Expansion into FX Market Making
Profit & Loss
Cantor Fitzgerald is targeting mid-market clients as it seeks to build out its footprint in FX and expand into the electronic market making business
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Clearing & Settlement

Minister Grants Australian CS Facility Licence To CME
On 30 September 2014, Senator the Honorable Mathias Cormann, Acting Assistant Treasurer, granted an Australian clearing and settlement (CS) facility licence to Chicago Mercantile Exchange Inc. (CME) under section 824B(2) of the Corporations Act 2001.
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Technology the biggest barrier to T+2 – The TRADE Poll
The Trade
Improving technology for settlement instructions is the top challenge facing buy-side firms preparing for the introduction of T+2 in Europe, according to theTRADEnews,com’s September poll.
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ESMA accelerates clearing mandate but frontloading headache remains
The Trade
A decision by European regulators to reduce the timeframe for buy-side compliance with new clearing rules for interest rate swaps has been welcomed, but contentious ‘frontloading’ requirements are a continuing concern.
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Collateral management – How market infrastructures can address the challenges
Ted Leveroni, The Depository Trust and Clearing Corporation (DTCC) – Risk.net
Looking at the latest developments in the world of collateral management, in an interview sponsored by the Depository Trust & Clearing Corporation (DTCC), Risk sits down with Ted Leveroni, executive director of strategy and buy side relations.
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Regulators plan standard stress tests for CCPs
Cecile Sourbes – Risk.net
International regulators are planning standard stress tests for clearing houses – a recommendation made in recent weeks by both BlackRock and JP Morgan – as concerns grow about the risk management and supervision of central counterparties (CCPs).
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Indexes & Products

VIX Spot Index Now Includes S&P 500 Weekly Options (Part 2)
Matt Moran – www.cboeoptionshub.com
Today CBOE is beginning its calculations of the spot value of the CBOE Volatility Index (VIX ) using S&P 500 Index (SPX) options with weekly and standard 3rd Friday expirations that more closely bracket the 30-day target timeframe. While this change is not expected to have a dramatic impact on the spot VIX Index, the change is a more precise enhancement to the VIX as the premier 30-day measure of the expected volatility of the S&P 500 Index.
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Flows Into European ETFs Reverse Course
Juliet Samuel – MoneyBeat – WSJ
The eurozone’s woes aren’t showing any signs of an imminent fix – and its problems are showing up in the fund flows. European exchange-traded funds saw a whole year’s worth of growth come to an end last month, according to figures from Lyxor, the continent’s third biggest ETF provider.
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Technology

Technology & innovation: special focus
Euromoney Magazine
From cloud technology to cashless payments, digital currencies to social media, mobile banking to FX robots… financial institutions worldwide are looking to lead technological advances while also trying to keep up with them. And as well as the cost of innovation, many organizations are finding much of their technology budgets focused on dealing with regulatory burdens. Here is the latest coverage from Euromoney.
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A Digital Revolution of Wealth Management
Becca Lipman – Wall Street & Technology
Digital advisory solutions are helping advisers with back-end efficiencies and client-facing platforms so they can focus on their core business.
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Novia to offer IBOSS analysis tools to scrutinise fund performance
Julia Rampen – Investment Week
Wrap provider Novia has announced a partnership with portfolio analysis service IBOSS to allow more in-depth analysis of fund performance.
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FCA Approves Bondcube as Crossing Network
Marina Daras – WatersTechnology
Bondcube, an electronic fixed-income trading system that aims to match buyers and sellers of difficult bond orders, has received approval from the UK Financial Conduct Authority (FCA) to operate as a crossing network.
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News Brief: SunGard Makes a Quantum Leap in Treasury & Risk Management
SunGard has introduced Quantum Six, a highly intuitive, web-based treasury & risk management platform that leverages the latest in cloud technology. Quantum Six offers corporate treasurers an ergonomic design for enhanced usability and mobility as well as a fully enabled web platform to help reduce total cost of ownership.
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Five SunGard Solutions Awarded 2014 SWIFT Accreditations
SunGard’s IntelliMatch Operational Control, XSP, SunGard Global Network (SGN), AvantGard Managed Bank Connectivity (Echos) and AvantGard Trax solutions have secured the SWIFT Certified Application labels, which demonstrate that they successfully meet well-defined requirements around SWIFT standards.
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Enforcement

Merrill team ordered to return $6.6 mln in signing bonuses to Barclays
Jed Horowitz – Reuters
Two brokers at a Beverly Hills office of Bank of America’s Merrill Lynch must collectively return more than $6.6 million in signing bonuses to Barclays Capital for leaving the firm’s U.S. broker unit after working only three-and-a-half months, a regulatory panel has ruled.
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Environmental & Energy

Nobel Prize in physics goes to inventors of environment-friendly light source
Associated Press
Isamu Akasaki and Hiroshi Amano of Japan and U.S. scientist Shuji Nakamura won the Nobel Prize in physics on Tuesday for the invention of blue light-emitting diodes — a new energy efficient and environment-friendly light source.
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UK urges Europe’s leaders to back ambitious climate targets
Ed King, RTCC (Responding to Climate Change)
European leaders are discussing a 40% emission reduction goal based on 1990 levels, but talks are in deadlock, with a six-country coalition led by Poland holding out for more cash in return for cuts.
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(Australia’s) Labor willing to back plan to exempt aluminum industry from RET
Daniel Hurst and Oliver Milman, theguardian.com
Labor has confirmed it is prepared to accept a proposal to exempt the aluminum industry from the renewable energy target.
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***LB: Also in this story “The RET requires that 41,000 gigawatt hours of Australia’s energy comes from renewable sources, such as solar and wind, by 2020. Energy providers have to buy clean energy certificates to reach this goal.”

Asia-Pacific

Korea Exchange to launch volatility, index futures in Nov.
Kim Eun-jung – Yonhap
South Korea’s bourse operator said Monday it will launch two index futures on a market estimate of future volatility and four sector indexes next month to offer a wider range of hedging and investment options.
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SGX securities volumes remain becalmed
Simon Osborne – The Trade
The volume of securities traded at the Singapore Exchange failed to revive last month. In September, total turnover increased by 1% to over S$21 billion, compared to the previous month. However average daily turnover fell by 4% month-on-month and was 34% lower year-on-year.
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Frontier Markets

Turkey struggles in search for sustainability
Nick Kochan – Euromoney Magazine
There’s a new buzzword from Ankara to Istanbul in Turkey’s financial markets: sustainability. Not of the environmental kind, but borne of a desire to keep the positive developments of the country’s economy, and its banks, flowing.
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Signs of progress in Istanbul’s capital markets
Nick Kochan – Euromoney Magazine
Two bold moves by Borsa Istanbul indicate that the exchange is seeking to take advantage of the Turkish economy’s new found confidence. Both focus on its understanding that Turkey needs to facilitate markets and expertise to leverage economic growth. The first is the creation of a partnership with the US stock exchange operator Nasdaq OMX. The second is the launch of a private market for unlisted companies.
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TASE Launches New Index: Tel Bond-Floating The New Index Comprises Floating Interest Rate Corporate Bonds Included In The Tel Bond-Universe
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