First Read

CBOE’s Ed Tilly Takes ALS Ice-Bucket Challenge
I’m a little wet and the water was cold, but I was thrilled to participate in the ALS Ice-Bucket Challenge this afternoon. I’ve challenged three others to do the same – Steve Sears of Barron’s, Rich Repetto of Sandler O’Neill, and market commentator Jon Najarian.


NASDAQ OMX NLX Team Takes the MND/ALS Ice Bucket Challenge
The NASDAQ OMX NLX team in London took the ALS Ice Bucket Challenge, or MND as it is called there. The team poured ice water on each other one after another starting with NLX CEO Charlotte Crosswell. Crosswell called out the FT’s Phil Stafford, FOW’s Will Mitting and Luke Jeffs and Financial News’ Tim Cave.

***** We will see if the press boys in London can keep a stiff upper lip, or whether they will just be stiff when they take the challenge.


OCC’s Cahill Takes the Ice Bucket Challenge
John Lothian News (JLN)
OCC President and CEO Mike Cahill participated in the ALS Ice Bucket Challenge on August 25, 2014. Mike was nominated by Gary Katz of ISE Exchange and challenged Kim Taylor, President of CME Clearing at CME Group, Michael Bodson, President and CEO of DTCC and Dave Downey, CEO of One Chicago.

***** I volunteer to pour the ice water on Downey.


CFTC Names Christopher J. Kirkpatrick as Secretary of the Commission
Christopher J. Kirkpatrick was named Secretary of the U.S. Commodity Futures Trading Commission (CFTC) today. He will lead CFTC’s Office of the Secretariat.

***** The office of the Secretariat is where the real horse race is.


The Martin Act
David Voreacos – Bloomberg
Prosecuting financial fraud is hard. The cases are complicated, the laws are often narrow and success depends on proving not just bad actions but bad intent. What if there was a sweeping, simple statute that could turn almost any form of financial wrongdoing into a crime? There is, and it’s in the hands of prosecutors in Albany and Manhattan. It’s called the Martin Act, and it’s been used to force changes and collect billions in fines from investment banks, insurance companies and mutual funds when federal officials seemed helpless to act.

***** The better law is the Martian Act where we blame everything on Martians.


Steve Crutchfield, EVP at IntercontinentalExchange – How to Build an Options Trading System (In Ten Minutes)

“You’ve got to come up with some numbers that describe the universe based on data that fit that model.”

Steve Crutchfield, Executive Vice President at IntercontinentalExchange, explains the three key components of building a trading system. Beginning with a brief history of the New York Stock Exchange, Crutchfield gives a glimpse of trading activity in its early stages and its evolution into today’s intricate electronic systems. Crutchfield emphasizes that looking at historical data and determining which numbers to pull out from it is a difficult problem to solve, among many other challenges in the trading world today.

Watch the video »


[Video] Yo ho ho: From hedge fund to rum maker
Mary Hanan –
Bridget Firtle loves numbers. She studied finance as an undergrad, then, earned her MBA and promptly went to work for a hedge fund on Long Island, where she analyzed consumer products. Her specialty: global alcoholic beverages.

***** If you run the numbers on the rum business, does that make you a rum runner?


Extended Trading Hours Volume at Record High So Far This Month
Matt Moran – CBOE Options Hub
CBOE will host the 3rd Annual Risk Management Conference Europe on September 3 – 5 at the beautiful Powerscourt Hotel in Ireland. I anticipate that one of the main topics at the conference will be – how can investors manage risk around the clock, especially during non-US trading hours?

***** My risk is not analog, i.e. around the clock. It is digital.


ADM opens new downtown Chicago headquarters
Archer Daniels Midland Co.’s new downtown Chicago headquarters is open. The office, 77 W. Wacker Drive, opened today with about 70 employees, the company said.

***** ADM, the Supermarket of the World. Stop by for their ethanol samples.


Sponsored Content
Katten’s Summer 2014 Review: Financial Services Regulatory and Legal Development Highlights
Wednesday, September 10, 5p.m., New York

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The panel discussion will be moderated by Arthur Hahn, global co-chair of the Financial Services practice, and panelists will include six Katten attorneys, including special counsel Gary DeWaal. To register for the program, click here

content from:
Katten Muchin Rosenman LLP


Lead Stories

The S.E.C.’s Use of the ‘Rocket Docket’ Is Challenged
PETER J. HENNING – Dealbook – NY Times
There is a nickname litigators use for courts that push cases through the system with great alacrity: the “rocket docket.” Perhaps the most famous is the United States District Court for the Eastern District of Virginia, where complex civil cases will wrap up discovery in a few months and be decided in less than a year.

ASX chief pleas for reform gridlock to end
Andrew White – The Australian
THE newest director on the Business Council of Australia board, Elmer Funke Kupper, has hit out at claims the peak body’s call to foster globally competitive industries amounted to “picking winners”, and called for the government to prioritise reforms.

SGX To Introduce Reduced Board Lot Size From 19 January
Singapore Exchange (SGX) will reduce the standard board lot size of securities listed on SGX from 1,000 to 100 units from 19 January 2015. A smaller board lot size will make it more affordable for retail investors to invest in a wider range of equities, including blue chips, and enable them to build more balanced and diversified portfolios.

Asset-Backed Bonds Facing Tougher SEC Disclosure Rules
Dave Michaels – Bloomberg
Sellers of bonds backed by mortgages and auto loans would have to give investors details including the borrowers’ income and credit scores under rules the U.S. Securities and Exchange Commission is poised to consider this week, according to two people briefed on the plan.

CME says technical issue from technology upgrade caused trade halt
CME Group Inc, the largest U.S. futures exchange operator, said on Monday that a technical issue resulting from planned software reconfigurations had caused its latest electronic trading outage.


FTSE, Markit and Stoxx confirm compliance with Iosco
Richard Jory –
he principles, issued on July 2013, aim to promote benchmarks by addressing issues around governance, the quality of benchmark design and methodology, and accountability

ESMA Announces New CWG For Secondary Markets SC
Following the call for interest for the renewal of the Consultative Working Group for the Secondary Markets Standing Committee, ESMA today announces the composition of the new group.

CFTC and Ferc see a changing of the guard
Energy Risk staff –
Both the US Commodity Futures Trading Commission (CFTC) and the Federal Energy Regulatory Commission (Ferc) – the two principal US commodity and energy market regulators – have experienced significant shifts among their commissioners in the past few months.

CMCRC argues case for effective spreads
The Trade
Professor Michael Aitken has explained why he thinks the methodology used by the Capital Markets Cooperative Research Centre (CMCRC) is valuable as transaction cost analysis (TCA).

Exchanges & Trading Facilities

CME to leave wheat storage rates unchanged next month
The CME Group will leave the maximum storage rate for deliverable Chicago Board of Trade wheat unchanged next month at roughly 8 cents a bushel per month, the exchange said in a statement on Monday.

CME expands live cattle futures trading limit effective Sep. 7
The Chicago Mercantile Exchange will expand live cattle future’s daily price limits for the last two days of trading beginning Sept. 7 for trade on Monday Sept. 8, the exchange said in a statement on Monday.

Moscow profits despite futures slump
Luke Jeffs – Futures & Options World
Moscow Exchange’s shrugged off large falls in futures trading activity to report record second quarter results driven largely by strong equities trading and post-trade services.

Moscow Exchange Announces 2Q 2014 Results

NZX Consults On Continuous Disclosure

CBOE, C2 and CFE Trading Schedule For Labor Day Holiday

Toronto Stock Exchange, TSX Venture Exchange, Montreal Exchange, TMX Select And Alpha Closed For Labour Day

Direct Edge Trading Notice #14-32: Market Holiday Reminder – Labor Day

MIAX Options Exchange Holiday Schedule – Labor Day

SIFMA Market Close Recommendations For The U.S. Labor Day Holiday

Hedge Funds & Managed Futures

US fund managers lose out to European rivals
Sarah Krouse – Financial News
European fund managers reclaimed territory from their US rivals in the first half of the year, taking three of the top five spots in the league table for net sales in Europe, according to Lipper data.

Soros-Backed Insurer Tops Paulson Bets as U.S. Rules Loom
Zachary Tracer – Bloomberg
Essent Group Ltd. (ESNT), the mortgage-insurer backed by George Soros and Goldman Sachs Group Inc. (GS), is beating older rivals in the stock market as the U.S. plans to tighten regulation of the industry.

Hedge Funds Sue to Get Argentine Bond Payment in London
A group of hedge funds, including George Soros’s Quantum Partners and J. Kyle Bass’s Hayman Capital, is seeking a 226 million euro interest payment on Argentine bonds from Bank of New York Mellon that was blocked by a United States judge last month.

Banks & Brokers

UK account holders flock to Swedish bank’s ‘church spire’
Martin Arnold – Financial Times
Tucked away in a leafy side street of St Albans, a prosperous commuter town north of London, is a red-brick house with little to identify it as a branch of one of the fastest-growing banks in Britain. When you climb the stairs to the first floor, it feels more like entering a quiet doctor’s surgery than a buzzing outpost for one of Europe’s 30 biggest banks by assets.

Switzerland’s Pictet Reports Results for First Time in Its 209-Year History
John Letzing – WSJ
A 209-year-old Swiss bank publicly disclosed financial results for the first time in its history on Tuesday, underlining the sea change in the country’s traditionally secretive banking sector.

Video – Goldman Sachs Plans Smaller New-Partner Class
Fewer rising stars will be shining at Goldman Sachs this fall. Goldman is likely to bestow its prestigious partner designation, which often comes with millions of dollars in annual pay, on no more than 70 employees.

Barclays’ boys club
Sujeet Indap – Financial Times
Barclays’ most senior rainmakers held important client meetings last Wednesday. But rather than inside a wood-paneled boardroom, those meetings took place on the tree-lined fairways of Ridgewood Country Club, 20 miles west of Manhattan in bucolic New Jersey.

Clearing & Settlement

Industry fears Mifid shake-up of futures clearing
Cecile Sourbes –
Dealers fear European rules designed to broaden access to over-the-counter derivatives clearing houses could be extended to the futures market, where a similar service already exists but is subject to much looser rules. If the stricter OTC standards were applied in the exchange-traded world, the service would require a radical rethink and may not be possible at all, banks and industry bodies argue.

Indexes & Products

First 10-year UST 3x short fixed-income ETF listed on LSE
Richard Jory –
Boost launches UST 3x short ETF; Source launches JP Morgan Macro Hedge Dual Vega Target 4% TR Ucits ETF; Nasdaq OMX lists Calamos Focused Growth ETF


Accuracy in the Financial Data Supply Chain
Becca Lipman – Wall Street & Technology
Some of the best-practices from the retail world’s physical supply chain, including data standards and visibility, can be leveraged for efficiency in financial services.

CQG Preps Mobile Charting, Cross-Asset Data
Max Bowie – WatersTechnology
Data, charting and trading software vendor CQG is enhancing its CQG M mobile data and trading application with charting tools and data on multiple asset classes in response to customer feedback, as part of an effort by the vendor to make the mobile application more relevant to users’ workflows.

Environmental & Energy

South Stream gas project may now be a pipe dream
Guy Chazan, Financial Times
In November 2005, a pipeline called Blue Stream was inaugurated to bring Russian gas across the Black Sea to Turkey. It was, said President Vladimir Putin, who attended the ribbon-cutting ceremony, “just the start”.

Solar giant to close Australian R&D unit
Peter Hannam, The Sydney Morning Herald
A giant Chinese solar energy firm, originally based on Australian technology, plans to close its local research arm amid concerns about the future of renewable energy in the country.

***LB: Also in this story “Wuxi Suntech recently announced a plan to consolidate most research activities at its base in China. The Abbott government’s signals that it will cut the national renewable energy goal also reduced confidence about future opportunities.”

(Australia’s) ‘Direct Action’ could meet emissions target if Coalition allows changes
Lenore Taylor, Guardian Australia
Extensive changes to the Abbott government’s “Direct Action” climate change policy being proposed by independent senator Nick Xenophon could bring it within reach of meeting Australia’s 2020 emissions reduction target, new research shows.


Second Asia structured product multi-dealer platform to launch
Justin Lee –
Competition in the Asian structured product multi-dealer platform arena is set to increase with Swiss bank Vontobel planning to launch a platform in Asia similar to its Deritrade offering in Europe, according to a senior executive at the bank.

No Sign of Young Japan Stock Buyers as Tax Lures Ignored
Yoshiaki Nohara and Yuko Takeo – Bloomberg
History is working against Japan’s government as it seeks to convince a new generation of investors that equities are the best bet for funding retirement. A program of tax breaks that started Jan. 1 hasn’t proved to be the answer, with less than 9 percent of investments coming from people under 40.

Of Xi’s material world
David Keohane – Financial Times
China needs to rebalance its economy towards consumption over the next while if it’s to shift the economy away from a reliance on debt-driven investment and all of the “this is nuts” type excess that it can bring about.

Bursa Malaysia Introduces ASEAN Post Trade Services
Bursa Malaysia Berhad (“Bursa Malaysia”) introduced ASEAN Post Trade services to its Participating Organisations (POs) for outbound (non-Bursa Malaysia Securities’) trades executed on participating ASEAN stock exchanges that are currently on the ASEAN Trading Link. These post trade services are available on subscription basis.

Taiwan Stock Exchange Completes Rollout Of Second Generation FAST System – Access To Taiwan Market Now Faster And More Convenient
Taiwan Stock Exchange (TWSE) has successfully rolled out its second generation FAST (Fully Automated Securities Trading) system, replacing all existing trading platforms. The new proprietary system boosts TWSE’s trading capacity by three times, reduces latency by seventeen times and doubles system efficiency.

Thai Bourse Holds The 11th Mutual Fund Fair On August 29-30

Thai Bourse: 119 Listed Companies Pay THB 97.38 Bln In Combined Interim Dividends For H1/2014

Roger Tsui Chi Fung Banned For Providing False Information To Hong Kong’s Securities And Futures Commission

Shenzhen Stock Exchange Market Bulletin 25 August, 2014, Issue 29

HKEx: Scrip Dividend Scheme In Relation To The Interim Dividend For The Year Ending 31 December 2014 – Calculation Of Market Value

Frontier Markets

Bulgaria: Eurozone entry long way off
Farah Khalique – Euromoney Magazine
Bulgaria’s ambition to join the euro is slipping further out of reach as the bank run on its fourth-largest lender Corporate Commercial Bank (KTB) brings allegations of corruption and political instability to the fore and further diminishes the country’s standing in Brussels, say analysts.

Hits ‘n’ misses: Analysing Raghuram Rajan’s first year in office
Business Standard
RBI Governor Raghuram Rajan will soon be completing his first year term as RBI Governor. He came in at a time when the rupee was touching new lows and all measures taken to rein in the current account deficit proved futile. A series of subsequent measures announced by Rajan helped control the rupee as well as provided comfort to the equity markets.

TASE Examines Moving To Monday-Friday Trading Week – Board Of Directors Supports Proposed Change

Cairo Amman Bank – Flash Comment: Budget Deficit Widens In The First Half Of The Year Due To Sluggish Foreign Grants

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