The A,B,C’s: Ian Morley’s Tips for Emerging Managers
Emerging managers have always faced challenges getting their firms off the ground. From establishing a track record to building the infrastructure needed to grow, firms are now faced with a new regulatory regime in the US and Europe that puts additional hurdles in their way.
Ian Morley, chairman of Wentworth Hall Consultancy in London spoke with Jim Kharouf, editor-in-chief of John Lothian News at the Emerging Manager Forum in Miami in December
about the challenges that managed futures funds face today. He said that Dodd-Frank and European rules have made compliance and reporting more onerous on managed futures firms and hedge funds, but that is only one part of the problem.
JLN/MarketsWiki 2014 Annual Survey – Please Give us 30 Seconds of Your Time
John Lothian News
We say “annual” but, quite frankly, it has been three years since we’ve conducted one, so the last one is getting a little, shall we say, stale. Please click the link below and answer five simple questions. 30 seconds of your time once every three years? It isn’t too much to ask, right? Besides, you might win a valuable prize.
***DA: The grand prize has been decided. Actually we decided to let the winner decide – between an iPad Mini or a pair of Bose Quiet Comfort Noise-Canceling Headphones. Can’t win if you don’t play, so click on over and give us some feedback.
Trading firm Jump Trading LLC gives $25 million to medical research project
Lynne Marek – Crain’s Chicago Business
Chicago trading firm Jump Trading LLC is donating $25 million to fund a joint medical research project between a Peoria simulation and education center it helped build and the University of Illinois at Urbana-Champaign’s College of Engineering.
***** A big hat tip to Jump Trading for their generosity.
Deconstructing Futures Returns: The Role of Roll Yield
Campbell & Company has released its latest white paper, Deconstructing Futures Returns: The Role of Roll Yield, which aims to demystify roll yield and address misconceptions regarding its nature, measurement and relevance. In its illustrative paper, Campbell seeks to provide clarity on this oft-overlooked component of futures returns, which can have a significant impact on the gain or loss a futures investor experiences over the lifetime of a trade.
***** And Campbell & Company keeps on rolling.
Boss Took Liberties – and Then Some
Courthouse News Service
A boss forced a young employee to submit to workday spanking sessions in the office, and to clean his house while the boss fondled himself wearing boxer shorts, the man claims in court. Jason Lee sued Eagle Market Makers and Ronald Manaster in Cook County Court.
***** This story is almost a month old, but we missed it. It is involves accusations of inappropriate behaviour by Eagle Market Maker owner Ron Manaster towards a newly hired employee. I will leave the pithy comments to you.
‘Landmark’ crackdown on fake shares fraudsters
Danny Shaw – BBC News
Criminal gangs who trick people into investing in worthless shares have been targeted by police in the biggest ever international crackdown on the fraud. The operation resulted in 110 arrests – mostly in Spain and the UK.
***** As someone who is a Purdue Boilermaker, I have always abhorred the name “Boiler Room” to describe this type of criminal activity. I always thought “Hoosier Room” was more appropriate.
8 Things I Learned from Warren Buffett this Weekend
The Reformed Broker
The 2013 Berkshire Hathaway annual letter to shareholders came out over the weekend and, as usual, it’s loaded with interesting insights from the chairman, Mr. Warren Buffett. I’ve spent a chunk of the weekend going through this year’s missive and I’ve pulled out what I believe are the most important takeaways for a professional investor and young entrepreneur such as myself.
***** If I ever go back to being a broker, I will be the Relapsed Broker.
Bitcoin Is Apparently A Rich, White, Male Disaster
Mark Gongloff – Huffington Post
Here’s more proof that women make better investors than men: It’s quite likely that almost no women lost any Bitcoins in the great Mt. Gox meltdown of 2014.
***** Give me Bitcoin or give me death? What, my Bitcoins were stolen? Dang there is another 10 years living in my parents basement!
Five Years Later, an Over-the-Top Wall Street Blog Returns
SYDNEY EMBER – NYTimes.com
Leveraged Sell-Out, a blog that parodied the musings of young Wall Street bankers, is back with new postings, five years after the financial crisis.
***** What financial crisis?
Gary DeWaal’s Bridging the Week: February 24 – 28 and March 3, 2014 (Both Block Trade and EFRP Woes; Regulator Envy)
Gary DeWaal and Associates LLC
The necessity to comply precisely with US exchange requirements regarding Exchange of Futures for Related Positions and Block Trades was highlighted last week through disciplinary actions brought by the CME and ICE Futures. Also, a UK Financial Conduct Authority enforcement action suggests the need to consider carefully the impact of not telling one regulator about a material enforcement investigation or action being undertaken by another regulator regarding an affiliate even when the affiliate may be outside the same country.
Vol Spike: CBOE Futures Exchange’s Jay Caauwe Introduces the Short-term Volatility Index
In February 2014, the CBOE Futures Exchange began listing contracts on the short term volatility index (VXST) – a 9-day variant of its flagship 30-day VIX futures.
In an interview with John Lothian News Editor-At-Large Doug Ashburn, CFE’s Jay Caauwe discusses the launch of VXST, the rationale behind the listing of VXST futures and which participants and strategies will be prevalent.
MarketsWiki Page of the Day
MarketsWiki Recent Updates
Companies, Organizations and Groups
47,400,842 pages viewed, 7,832 articles, 180,029 edits
Obama Said to Trim Budget Request for Struggling Swaps Regulator
Silla Brush – Bloomberg
President Barack Obama is set to seek a $280 million budget for the U.S. Commodity Futures Trading Commission that, while more than the commission currently gets, is lower than his previous request for an agency that has said it lacks the resources to fully oversee markets, according to people with knowledge of the matter.
Toronto Stock Exchange keen on partnering with BSE: Canadian Governor General
Canadian Governor General David Johnston on Friday said the Toronto Stock Exchange was keen on partnering with the Bombay Stock Exchange (BSE), while attending an opening bell event during his week-long state visit to India.
Lawmakers Debate Dark Pools at Hearing
Scott Patterson – MoneyBeat – WSJ
Concerns about a pickup in dark-pool trading dominated a House Financial Services hearing about stock-market regulations Friday.
Dark pools: The shares that face a less liquid future
Anish Puaar – Financial News
Europe’s new markets directive agreed in January aimed to cap the proportion of share trading done in so-called dark pools, but the real impact of the new regime hasn’t been clear, even for the people who wrote the rules. Until now.
Mid-cap trades threatened by dark pool rules
Anish Puaar – Financial News
More than one quarter of mid-cap stocks would have been hit by new European rules designed to limit trading in private share-trading venues known as dark pools if they had been in force last year, according to a Financial News analysis.
Fed Lifts Veil Slowly on Bank Oversight in Era of Transparency
Craig Torres – Bloomberg
The Federal Reserve this month will take a step toward revealing more about its oversight of the financial system, an area where the central bank has yet to match the strides it has taken toward transparency in monetary policy.
Banks welcome FCA focus on commodity trading houses
Gillian Carr – Risk.net
Senior bankers are privately welcoming a recent newsletter by the UK Financial Conduct Authority (FCA) that calls for greater attention to be paid to the growing role of independent commodity traders.
Blackstone’s Schwarzman Has $375 Million Payout on ’13 Exits
Devin Banerjee – Bloomberg
Blackstone Group LP chief Steve Schwarzman received $374.5 million last year in pay and cash dividends, an increase of 76 percent from 2012, as the world’s biggest alternative-asset manager took advantage of rising equity markets to sell shares of companies.
Bitsleuths Start Hunt for Mt. Gox’s Missing Bitcoin
Neelabh Chaturvedi – MoneyBeat – WSJ
As any caper-film fan can attest, the cops use marked bills to sniff out criminals. Cyber sleuths are trying similar tactics to figure out what happened to Mt. Gox’s missing bitcoins.
Cybersecurity Concerns Force Boards to Rethink Risk Oversight
Experience in overseeing the growing threat of cybersecurity risk is one of the key attributes boards will look for when appointing their next new corporate director, according to the 11th annual What Directors Think survey, a comprehensive report on boardroom trends.
SEC’s Piwowar: Give Investors Money-Fund Choices
MoneyBeat – WSJ
As U.S. securities regulators move to finalize long-awaited rules aimed at reducing risks to the $2.7 trillion money-market mutual-fund industry, one official wants investors to have greater choice in the types of funds in which they can invest.
Why the Bank Leverage Ratio Is Important
MAYRA RODRíGUEZ VALLADARES – NYTimes.com
In speaking about the leverage ratio, an extremely important bank capital requirement, Thomas Hoenig,vice chairman of the Federal Deposit Insurance Corporation, said: “I think we’ve got the details worked out. Now it’s just getting the schedule.”
‘A terrible disappointment’ – IASB fumes as US rejects common approach
Lukas Becker – Risk.net
Efforts by European and US accounting standard-setters to agree a common treatment of financial instruments are in peril after the US Financial Accounting Standards Board (FASB) decided elements of the work on classification and measurement – the second section of the three-part project to hit problems – were too complex.
CFTC Staff Re-Issues Frequently Asked Questions on Commodity Options
In an effort to address questions the U.S. Commodity Futures Trading Commission (Commission) has received regarding the Trade Option Form (Form TO) filing process and the circumstances which trigger the filing requirement, today the Division of Market Oversight (DMO) is re-issuing the Frequently Asked Questions (FAQs) document on this topic.
Fee Rate Advisory #4 for Fiscal Year 2014
Pursuant to Section 31(j)(2) of the Securities Exchange Act of 1934, the Commission has determined that a mid-year adjustment to the Section 31 fee rate for fiscal year 2014 is not required.
Give Fees an Inch, and They’ll Take a Mile
In a bulletin for investors, the Securities and Exchange Commission is offering a stark reminder of the impact that investment fees can have on returns.
ASIC Facilitates Internet Securities Offers
Exchanges & Trading Facilities
Japan Exchange Group: Trading Overview in February 2014
Tokyo Financial Exchange Trading Volume In February 2014
Oslo Børs: Further Jump In Trading Volumes
February saw continuing growth in share trading volumes, and the level of activity in the stock market reached the highest level for almost 2 years.
Nadex Adds New Intraday Contracts for AUD/USD and GBP/USD Forex Pairs
The North American Derivatives Exchange (Nadex), a regulated online binary options exchange in the United States, announced today that it will be offering around-the-clock, overlapping two hour intraday binaries for the heavily traded AUD/USD and GBP/USD forex pairs.
Exchanges See Data Revenues Rise
Giulia Lasagni – WatersTechnology
Exchanges continue to report increases in market data revenues in their financial results, following a raft of similarly largely positive results in recent weeks (IMD, Feb. 17)—though, post-financial crisis, Latin America and Asia are no longer delivering significantly higher levels of returns than their American and European counterparts.
CME to allow delivery of heifers against live cattle futures
CME Group Inc said on Friday that it plans to amend deliveries against live cattle futures to include heifers beginning with the listing of the August 2015 delivery month, the exchange said in a statement.
NYSE Member Firms Report Fourth-Quarter 2013 Results
NZX Gender Diversity Annual Statistics
MIAX Options Exchange: Amendment To The MIAX Options Regulatory Fee Beginning April 1, 2014
Direct Edge Trading Notice #14-08: EDGA & EDGX Fee Schedule Changes
TOM MTF Statistics Week 9, 2014
Hedge Funds & Managed Futures
Hedge funds battle to show their worth in EM sell-off
A sell-off in emerging markets has given hedge funds a chance to prove they can profit from even the most testing market conditions – and try to justify their lucrative fees.
Pimco Total Return trails 71 pct of peers in February -Morningstar
The Pimco Total Return Fund, the world’s largest bond fund, trailed more than 70 percent of its peers in February despite returning to gains after a rough 2013, preliminary Morningstar data showed on Sunday.
London Defers to Newport Beach over Mystery Pimco Tweet
Phillipa Leighton-Jones – MoneyBeat – WSJ
Pimco’s London press office weren’t commenting this morning over the origin of a tweet, purportedly sent by co-founder Bill Gross, outlining some wonky thinking on China’s economic policy.
T Rowe Price recruits Peter Hunt
Joe McGrath – Financial News
US asset manager T Rowe Price has hired TT International partner Peter Hunt as vice president to the UK and Ireland institutional business, as part of the US fund manager’s continued expansion in Europe.
Norway changes fund managers and completes ABS exit
Mark Cobley – Financial News
The $838 billion Norwegian Government Pension Fund parted ways with nine of its external fund managers last year, while taking on its first new external fixed-income managers since 2011 after a tough year in the asset class.
Auction Frenzy Cramping Mid-Market Private-Equity Firms
Gillian Tan – MoneyBeat – WSJ
It’s a tough time to be a mid-market private-equity firm. High valuations and sharp competition from larger, deep-pocketed rivals are making it difficult for smaller firms to invest their funds.
Fortress Investment Group Bought $20 Million of Bitcoin in 2013
Paul Vigna – MoneyBeat – WSJ
Fortress Investment Group appears to be the first big private-equity firm to have made a large-scale purchase of Bitcoin, the digital currency that’s currently in the middle of a maelstrom.
Bankers jump to buyside after pocketing bonus
Matt Turner and Mike Foster – Financial News
A swathe of investment banking employees are looking to make a move to the buyside, according to market participants, raising concerns among bank business heads over their ability to retain staff.
Pension funds to debate Scottish independence
Mark Cobley – Financial News
The UK’s pension funds are set to debate the impact of Scottish Independence on their investments next week, at a special event being held on the eve of the National Association of Pension Funds’ annual investment conference in Edinburgh.
Periodic Table of Investment Returns 1994-2013
The Reformed Broker
CFTC Commitments Of Traders Reports Update
Banks & Brokers
SEC investigating Goldman, Citi on bonds: WSJ
The Securities and Exchange Commission has launched a probe into how Wall Street banks, including Goldman Sachs Group Inc and Citigroup Inc, allocate and trade corporate bonds, the Wall Street Journal reported on Friday.
Former Knight Capital exec departs KCG
Tim Cave – Financial News
Kee-Meng Tan, one of the most senior European executives at Knight Capital, which merged with Getco last year to form KCG Holdings, has left the group, according to a person familiar with the situation.
BofA Waives ‘Gardening Leave’ for Goldman-Bound Banker
Gillian Tan – MoneyBeat – WSJ
Bank of America Corp. has taken the unusual step of allowing one of its most senior bankers to immediately begin working for a rival, waiving the so-called “gardening leave” period that it imposes on senior employees to safeguard sensitive deal information and client relationships.
A Maelstrom of Fraud Without Early Warning
ANTONY CURRIE – NYTimes.com
Citigroup has been caught up in a fraud in a basic business, a situation that should concern its rivals as well
Bank of Ireland Narrows Loss
Bank of Ireland PLC, the country’s dominant lender, Monday posted a much smaller loss for 2013 and said it is making sustainable profit this year, for the first time since the financial crisis struck in 2008.
A JP Morgan career that started in the headmaster’s study
Matt Turner – Financial News
When Viswas Raghavan interviewed for a role at JP Morgan before joining the firm in 2000, he was quizzed in the headmaster’s office at an old City of London School building used as an office by the bank.
Clearing & Settlement
Deutsche Börse plots Singapore-Frankfurt link
Michelle Price – Financial News
German exchange operator Deutsche Börse is exploring ways of linking its proposed Singapore clearing house with its existing Frankfurt clearer to reduce costs for users trading across Europe and Asia, according to two individuals familiar with the plans.
Indexes & Products
ETFs Are Getting Risky
Former Federal Reserve Chairman Paul Volcker once remarked that modern finance hasn’t done anyone except finance professionals much good. The automated teller machine is pretty useful, he said, but that’s about it. To which a lot of investors might reply: What about exchange-traded funds?
Borsa Italiana: “Best European Exchange For Listing ETFs”
Borsa Italiana is awarded ‘Best European Exchange for ETF Listings by etfexpress
Change of Component Issues for CNX Nifty
Tokyo Stock Exchange: New ETF To Be Listed On Mar. 24, 2014 (Mon.) – Nomura Asset Management – “NEXT FUNDS Russell/Nomura Fundamental Index Exchange Traded Fund”
Singapore Fixed Income Indices (SFI) Weekly
New Methodologies For Moscow Exchange’s Equity Indices To Take Effect
S&P Dow Jones Indices Expands Commodity Index Family with Forward Versions of S&P GSCI and S&P GSCI Single Capped Commodities
S&P Dow Jones Indices announced today the launch of forward 6- and 12-month versions of the S&P GSCI and forward 3-, 6- and 12-month versions of the S&P GSCI Single Commodities index that apply Capped Component rules.
Maple Leaves HFT Co-Lo for SpryWare Cloud
Max Bowie – WatersTechnology
A proprietary trading group at Maple Securities USA, the US subsidiary of Canada’s Maple Financial Group, is finalizing a migration from direct exchange feeds and an in-house co-location operation to a managed market data infrastructure run by Chicago-based low-latency data and technology vendor SpryWare in its Proximity Cloud hosted data service.
Thomson Reuters Launches Monitoring Tool On Eikon For Real-Time Analysis Of Oil Supply Chain
Innovative Service In Eikon Integrates Information From Multiple Sources, Providing Unique Monitoring Capability For Key Predictive Indicators In Commodities Markets
AxiomSL Implements XBRL Reporting Solution For Leading Banks In EMEA And APAC
Duco announces launch of Duco Cube Static Control solution
Duco has announced the launch of Duco Cube Static Control in response to growing market needs for static data control,clean-up, workflow and reporting.
SEC investigates Citigroup over fraudulent Mexican loans: source
The U.S. Securities and Exchange Commission is investigating Citigroup for accounting fraud after it disclosed bogus loans in its Mexican Banamex unit, a source familiar with the investigation said.
CFTC Obtains Default Judgment against Altamont Global Partners LLC and John G. Wilkins for Commodity Pool Fraud, Misappropriation, and Making False Statements to National Futures Association
The U.S. Commodity Futures Trading Commission today announced that Judge Gregory A. Presnell of the U.S. District Court for the Middle District of Florida entered a default judgment and permanent injunction Order against Defendants Altamont Global Partners LLC of Longwood, Florida, and its owner, John G. Wilkins, formerly of Chuluota, Florida.
CFTC Obtains Permanent Injunction Orders and Monetary Sanctions against Susan G. Davis, David E. Howard II, and Joseph Burgos for Fraudulent Solicitation of Managed Foreign Currency Trading Accounts
The U.S. Commodity Futures Trading Commission (CFTC) announced that Judge Katherine B. Forrest of the U.S. District Court for the Southern District of New York entered Consent Orders for permanent injunction against Defendants Susan G. Davis of Jersey City, N.J. and David E. Howard II of New York, N.Y., and a Supplemental Order assessing monetary damages against Defendant Joseph Burgos of Rutherford, N.J.
Federal Court Orders Arizona Resident Ray Thomas Brown to Pay over $1.2 Million for Solicitation Fraud and Misappropriation in Operating Two Commodity Scams
The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge Frederick J. Martone of the U.S. District Court for the District of Arizona granted the CFTC’s motion for summary judgment and entered an Order of permanent injunction against Defendant Ray Thomas Brown, of Phoenix, Arizona.
Ex-SAC trader Martoma seeks to toss insider trading conviction
Former SAC Capital Advisors LP portfolio manager Mathew Martoma asked a U.S. judge to throw out his insider trading conviction, saying federal prosecutors did not prove he committed a crime and that improper evidence and jury bias tainted the verdict.
[BCSC] Securities regulator issues amended notice of hearing alleging securities fraud against two individuals
[AMF Canada] Matter of Alain Péloquin – Notice of hearing
KRX Launches EXTURE+ – New Trading System
On March 3rd 2014, Korea Exchange(KRX) announced the launch of its new trading platform, EXTURE+. Based on x86 Linux servers, EXTURE+ is designed to provide enhanced performance reliability, expandability while minimizing development costs for member firms.
Inching toward SSC — SGX’s implementation of T+2
Tony Freeman – The Asset
As part of a plan to strengthen the securities market in Singapore, the Singapore Stock Exchange (SGX) and Monetary Authority of Singapore (MAS) announced that, among other steps, they intended to shorten the settlement cycle from trade date plus three days (T+3) to T+2 days by 2016.
HKEx Mainland Market Data Hub in Shanghai Commences Service
Exchange duplicates SFC’s regulatory role
Enoch Yiu | South China Morning Post
Now that the Securities and Futures Commission has declared it will enhance its role as a corporate regulator, what role should Hong Kong Exchanges and Clearing play in regulating listed companies?
Options trading error heightens clearing fears
Central clearing concerns have been reignited after an erroneous options trade pushed South Korea’s HanMag Securities to the brink of bankruptcy and set in motion the Korea Exchange’s default waterfall, mutualising W46bn of losses among clearing member firms.
Japan Commodity Clearing House SPAN Parameter Update effective March 3
HKEx Mainland Market Data Hub In Shanghai Commences Service
KRX Launches Voluntary Clearing Of OTC Derivatives
Hong Kong’s Securities And Futures Commission Amends Codes On Takeovers And Mergers And Share Repurchases To Align With New Companies Ordinance
Dalian Commodity Exchange Adds Minsheng, Everbright As Futures Margin Depository Banks
Dalian Commodity Exchange Announces Benchmark Listing Price Of PP Futures Contracts
DME Continues Growth Momentum With Record Trading Volumes
DME (Dubai Mercantile Exchange) today announced record average daily trading volumes (“ADV”) of 10,764 lots in February 2014, equivalent to almost 10.764 million barrels of crude oil per day. February’s total is 84% higher than February last year and is a 32% increase on the previous month.
Dubai Financial Market Performance – February 2014
Saudi Stock Exchange (Tadawul) Monthly Statistical Report – February 2014
Tech Mahindra meets FT’s restructuring committee today
Kritika Saxena – Moneycontrol.com
Reports have suggested that Tech Mahindra has been eyeing stake in Financial Technologies (FT). Interestingly, just a day after the committee was formed ; sources say Tech Mahindra executives met some representatives of the committee to explore initial contours of the deal.
Nigerian Stock Exchange Listed Bond Wins African Deal Of the Year Award
Tehran Stock Exchange Weekly Digest – 26 February 2014
Saudi Stock Exchange (Tadawul) Monthly Statistical Report – February 2014
Dubai Financial Market Welcomes Delegates From Japan’s Okasan Securities Group
The Visit Aimed To Gain Knowledge On Dubai’s Capital Market And Explore Investment Opportunities For The Group’s Customer Base
Malawi Stock Exchange Market Holiday
From bonds to books – without riding Goldman’s elevator
John Lefevre dialled in early to a conference call from his desk high up in Citibank Tower in central Hong Kong. He recorded his name as “UBS”, put the line on mute, and then dialled in again from another line, this time correctly identifying himself as a Citigroup employee.
The Financial Times breaks the law of large numbers
Ryan Chittum : Columbia Journalism Review
The paywalled Financial Times is the real digital-first newspaper, and it had a very, very good 2013. Online revenue now accounts for 63 percent of the FT’s overall sales, and digital subscriptions outnumber print ones by a wide margin.