First Read

Here come the Millennials, and good luck with that
Martin Mosbacher
When it comes to financial services, Millennials are poorly informed, suspicious and cheap. And yes, they also like smartphones. This according to a survey conducted by – here comes the plug — Corporate Insight.

The CI study suggests that the industry needs to reinvent its educational tools and research methodology. “Gamification” and community will be important in order to make educational tools more engaging. (Presumably this means Charles Schwab will soon be opening roadside branches in Farmland.) The report also concludes that Millennials don’t have warm and fuzzy feelings about bankers and brokers generally. In fact they blame them for many of their problems. They are still thought of more highly than members of Congress, but that is a low bar indeed.

Millennials put a high premium on transparency, so to be successful in selling to them you’ll need to be clear on why they need certain products and services and exactly what they will cost. Also, your pricing had better be as low as or lower than your competitors. Millennials understand online shopping. Finally, Millennials expect you to deliver an excellent mobile experience with a consistent experience across all digital channels.

Hybrid brokerage firms, who offer easy access to a variety of services at relatively low-cost, are tapped by Corporate Insight to be the winners. This may well be why Facebook and Google are looking at getting into the business as noted earlier in the week.

Time will tell if this actually comes to pass. It will be interesting to track Millennials through adulthood to see how many of these attributes prove generational, and how many in retrospect appear more age-related instead.


CQG’s Pat Kenny wins Fontana Citizen of the Year
It appears that Fontana, Wisconsin has now discovered that Pat Kenny is, indeed, the Most Interesting Man in the World. Pat was honored with the “Citizen of the Year” award at a Fontana Chamber of Commerce luncheon yesterday. Presumably and hopefully, Dos Equis was served.

***MM: As an aside (and aren’t all these remarks asides) JL has been named Elmhurst Memorial Patient of the Week but no pix have been released.

***DA: He doesn’t always win civic awards, but when he does, it is in Fontana, WI.


MarketsReformWiki Reaches 7 Million Milestone
John Lothian News
MarketsReformWiki, the regulatory adjunct to MarketsWiki and John Lothian News, surpassed the 7 million page view mark this week. The site, which went live in February 2011, is a comprehensive database of rulemakings, meetings, comment letters, and research papers, along with the top regulatory news of the day. Recent updates include the CFTC’s implementation timeline for packaged swap transactions and a white paper from DTCC on shortening the securities settlement cycle.


FTIL chairman Jignesh Shah arrested in NSEL fraud – Livemint
The Mumbai police’s Economic Offences Wing has arrested Jignesh Shah, chairman and group chief executive of Financial Technologies (India) Ltd, in connection with the Rs.5,574.34 crore fraud at National Spot Exchange Ltd (NSEL).

***MM: I hear the echo of many voices saying “told you so.”


NASDAQ OMX Shareholders Elect Members To Board Of Directors
Shareholders elected all nominated directors at the Annual Meeting of Shareholders for The NASDAQ OMX Group, Inc.

***MM: Given that NASDAQ is a client all I can say is…..Congratulations!


IntercontinentalExchange Announces Launch Of 64 New Energy Contracts
IntercontinentalExchange Group (NYSE:ICE), the leading global network of exchanges and clearing houses, today announced the introduction of 64 new energy futures and options contracts on May 12, 2014, subject to the completion of necessary regulatory and governance processes.

***MM: Which brings the total number of energy contracts offered by ICE and subsidiaries up to a number greater than the total number of energy traders in the world.. but that’s just a guess.


EU watchdog sounds warning over patchwork transaction tax
A tax on stock, bond and derivatives transactions in fewer than half of European Union member states would “not be good” for the bloc’s securities market, a top EU regulator said on Wednesday.

***MM: Ya think?


TT Opens the Nasdaq
Today, TT employees and CEO Rick Lane, Joe Noviello, Senior Managing Director at NASDAQ OMX eSpeed, and, most importantly, TT customers opened NASDAQ in Times Square to commemorate the company’s upcoming 20-year anniversary. TT recently announced its connection to NASDAQ OMX eSpeed, which gives all TT customers direct access to eSpeed’s liquidity pool to trade complex strategies across a range of U.S. Treasury securities and U.S. Treasury futures products through TT’s software, including its flagship X_TRADER platform.

***MM: A display of the improved relations between eSpeed and TT since the NASDAQ acquisition of the former.

***DA: For more on the contentious history, here is a recent piece we wrote:


Chicago Stock Exchange Signs Longterm Lease at 440 S. LaSalle
Chicago Stock Exchange, Inc. signed a long term renewal of approximately 33,000 square feet at 440 S. LaSalle. According to Davidson, Chicago Stock Exchange is making significant changes to their space to create a more collaborative environment.

***MM: Can’t wait to hear about what the NYSE has in mind for it’s trading floor.


Brian Moynihan’s Not-So-Secret Admirer
Christina Rexrode – MoneyBeat – WSJ
Bank of America Corp. Chief Executive Officer Brian Moynihan has at least one ardent admirer — Peggy McMahon, a shareholder from the Bronx. Ms. McMahon said she stopped in at the bank’s annual meeting in Charlotte, N.C., because she was vacationing in the South, and she ended up becoming a major player in what otherwise might have been a dull affair.

***MM: I have no idea what Peggy did to liven up the meeting but I’m guessing it had nothing to do with having an affair.



MarketsWiki Page of the Day
Bill Ferri

MarketsWiki Recent Updates


Gail Osten; Bill Templer; Bill Ferri

Companies, Organizations and Groups

Chicago Mercantile Exchange; London Stock Exchange Group plc; National Stock Exchange; CBOE Stock Exchange (CBSX)


CME Group metals products


Yield; Expiration


48,780,153 pages viewed, 7,947 articles, 182,686 edits
MarketsWiki Statistics

Lead Stories

Singapore Exchange hires Citic exec for China derivatives push
Jeremy Grant in Singapore –
SGX, the Singapore exchange, has hired a top executive at China’s Citic Securities International to head a new office in Hong Kong as part of a focus on drumming up business in Asia amid intensifying competition from exchanges in China.

SEC Finds High Rate of Fee, Expense Violations at Private-Equity Firms
A top Securities and Exchange Commission official said Tuesday the agency’s recent examinations of private-equity firms had found more than half allocated expenses and collected fees inappropriately, and in some cases, illegally.

‘Event-driven’ hedge funds steer into lead after rush to invest
Bill Ackman’s 9.7 per cent stake in Allergan, the maker of Botox injections, rose by that much last month when he revealed he was working with Valeant Pharmaceuticals on a hostile bid for the company. It was a trade that attracted wide comment from lawyers and rivals for its unusual structure and its audacity, but for investors it was simply the fact of such a large profit that caught the eye.

Seeking Tough Justice, but Settling for Empty Promises
Any charges against large financial institutions carry symbolic power. But the more crucial questions are which entities are held accountable, whether the culture that led to criminal conduct is changed and whether any individuals are ultimately brought to justice.

The Flash Crash – And Near Misses – Four Years Later
Walter Ferstand – Wall Street & Technology
In all seriousness, regulators need to continue to think of the Flash Crash as a possible precursor to a meltdown of the global financial system.

Studying the Rich
Boston Review
In the 1790s, Frederick Eden, concerned about the economy and the realities of the poor, went into the British countryside and began to collect data on household budgets for poor agricultural laborers. He collected budgets himself, got additional data from “respectable clergymen,” and hired others to get even more. The results were published in a major, groundbreaking work, The State of the Poor, in 1797. In the end, Eden had eighty-six families worth of data.


CFTC Announces Departure of Legislative Affairs Director John Riley
Commodity Futures Trading Commission (CFTC) Acting Chairman Mark P. Wetjen today announced that Legislative Affairs Director John Riley will depart the agency in May after a 30-year career in Federal service. Mr. Riley, a former Capitol Hill staffer, has led the Office of Legislative Affairs while Congress debated and passed landmark financial reform legislation and as the CFTC implemented its key provisions.

CFTC’s Division of Clearing and Risk Issues No-Action Letter for OTC Clearing Hong Kong Limited
The U.S. Commodity Futures Trading Commission’s (Commission) Division of Clearing and Risk (DCR) today issued a time-limited no-action letter stating that DCR will not recommend that the Commission take enforcement action against OTC Clearing Hong Kong Limited (OTC Clear) for failing to register as a derivatives clearing organization (DCO) pursuant to Section 5b(a) of the Commodity Exchange Act (CEA) or U.S. clearing participants of OTC Clear for failure to clear certain interest rate swaps and certain non-deliverable forwards through a registered DCO pursuant to Section 2(h)(1)(A) of the CEA and the implementing regulations thereunder.

Only Half-Way There in Markets Reform, Says Esma Chair
Marina Daras – WatersTechnology
Speaking at an event organized by the Association for Financial Markets in Europe (AFME) today in London, Steven Maijoor, chairman of the European Securities and Market Authorities, says that although ESMA is near to fulfilling the Group of 20 commitments and the development of a single rulebook for the financial services industry, “there is still a lot of work that needs to be done before the regulatory reform is over.”

Regulators See Growing Financial Risks Outside Traditional Banks
U.S. regulators have spent the past six years forcing banks out of businesses seen as risky. Now, they are beginning to worry that they have pushed some financial activity into the shadows and outside their legal reach.

ESMA Informs European Commission Of Its Intention To Ease Certain Frontloading Requirements Under EMIR
The European Securities and Markets Authority (ESMA) has today sent a letter to the European Commission advancing its intention to ease certain frontloading requirement under the European Markets Infrastructure Regulation (EMIR).

Exchanges & Trading Facilities

Tiefenbrun takes board role at Turquoise
Anish Puaar – Financial News
The former chief executive of Turquoise, the pan-European market majority-owned by the London Stock Exchange, has joined the firm’s board as a non-executive director after moving to Bank of America Merrill Lynch last year.

Euronext to list on its Dutch, French and Belgian exchanges in IPO – source
Euronext, which is being spun off by IntercontinentalExchange, will be listed on three of its exchanges in a stock market listing scheduled for June, a source familiar with the matter said on Wednesday.

IntercontinentalExchange Group – IntercontinentalExchange Group Reports Record 1Q14 Revenues and Adjusted Earnings
IntercontinentalExchange Group, the leading global network of exchanges and clearing houses, today reported record financial results for first quarter of 2014. For the quarter ended March 31, 2014, consolidated net income attributable to ICE was $262 million on consolidated revenues less transaction-based expenses of $932 million.

IntercontinentalExchange Group – IntercontinentalExchange Declares Quarterly Dividend of $0.65 Per Share
IntercontinentalExchange Group, the leading global network of exchanges and clearing houses, announced today a $0.65 per share dividend for the second quarter of 2014.

CME Group Announces First Trades of North American Physically Delivered Aluminum Futures
CME Group, the world’s leading and most diverse derivatives marketplace, today announced the first North American physically delivered Aluminum futures contracts were traded on Tuesday, May 6, by Macquarie Bank Limited, the executing firm.

Nasdaq Nordic Bows Tiered EOD Data Fees
Giulia Lasagni – WatersTechnology
Nasdaq OMX has introduced a new set of fees for data vendors who redistribute end-of-day data from its Nordic Exchange, succeeding a previous policy that allowed vendors to distribute end-of-day data to unlimited numbers of third-party recipients for a flat fee.

HKEx 2014 First Quarter Results

[SIX] Trading bell heralds third IPO in 2014 already

Borsa Italiana Monthly Update – April 2014

Vienna Stock Exchange Monthly Statistics – April 2014

BM&FBOVESPA Publishes April Market Performance

MGEX Open Interest Back On Record Sheet

Hedge Funds & Managed Futures

Man Group Hires Former Goldman Sachs Manager Pierre-Henri Flamand
Hedge fund manager Man Group said it has hired Pierre-Henri Flamand, a former head of proprietary trading at Goldman Sachs, who most recently ran hedge fund Edoma Capital Partners. Mr. Flamand will join Man Group next month and run a global fund investing in equities and debt, the hedge fund manager said Wednesday.

Blackstone plans regulated fund of hedge funds in Europe
Harriet Agnew –
Blackstone Alternative Asset Management, the world’s largest allocator to hedge funds, plans to launch a regulated fund of hedge funds in Europe, in the latest sign that the line is blurring between hedge funds and mainstream asset management.

Commodity funds down in 1st qtr, even as energy markets rally
Two-thirds of commodity hedge funds lost money in the first quarter, extending last year’s dismal run, possibly because they bet against higher crop and energy prices in a rallying market, data from futures broker Newedge and banker HSBC showed on Wednesday.

Hedge Funds Extend Their Slide
A bumpy trading environment is tripping up hedge funds. Big stumbles by some star managers drove hedge funds to back-to-back monthly declines for the first time in two years, according to researcher HFR Inc.

Hedge funds, fortunes and merit
Dan McCrum | FT Alphaville
Institutional Investor’s Alpha published its rich list for 2013 this week which, as Matt Levine has described with flair and some made-up maths, is only tangentially related to how well the hedge fund managers in question performed last year

Age over size affects relative hedge fund performance
eVestment –
Age appears to play a greater factor in relative performance than size. Young funds posted the highest cumulative returns since 2003 and during the past five years have also outperformed middle-aged and tenured funds.

Equities chief Scholefield departs Baring after eight years
Mark Cobley – Financial News
Tim Scholefield, head of equities at Baring Asset Management, has left the company, which has recruited a senior emerging-markets fund manager at a French asset management boutique to succeed him.

Growing Pains for a Goldman Sachs Fund
One of Goldman Sachs’s most notable investment vehicles, Petershill, has been less than extraordinary, effectively saved by one good bet among a number of duds, and the bank even came close to selling it to Credit Suisse in 2012. So when Goldman started a second version of Petershill, which buys stakes in big-name hedge funds, it came as something of a surprise to people in the industry.

U.S. risk council warns about asset managers, mortgage servicers
The U.S. financial risk council on Wednesday raised red flags about new, potentially risky practices by asset managers and nonbank mortgage servicers, which they said are not regulated as carefully as banks.

Banks & Brokers

Barclays to axe 19,000 jobs under revival plan
Barclays Plc said it will cut 19,000 jobs in the next three years and set up a “bad bank” of assets to run down as it tries to get a turnaround plan back on track by cutting costs and lifting profitability.

Algorithmic trading set to transform the bond market
Peter Lee – Euromoney magazine
Intermediating the bond markets is shifting from a principal risk-taking business for banks to a brokerage business. At a time when the IMF is warning of bond market illiquidity, innovative solutions are springing up. In the high-volume government bond markets, trade-execution algorithms will be new drivers of efficiency. In the corporate bond markets, new systems will drive efficient internalizing of orders and matching across networks of dealers.

A Note of Caution in Greek Banks’ Seeming Recovery
Greek banks, once seen as the most dangerous investment in the euro zone, have been on a tear of late. But amid the euphoria, some analysts have expressed caution.

Goldman Sachs Closes Broad Street Real Estate Credit Partners II With Over $4 Billion in Capital Available to Invest in the Strategy

Bank of America Shareholders Press Officials After $4 Billion Error
This year’s annual meeting was supposed to be a victory lap for Bank of America, with many of its mortgage problems receding and its deposits and credit card business growing.

ICAP Boss Gets Bonus Despite £55m Libor Fine
The chief executive of the City broking firm ICAP has had his annual bonus slashed in the wake of its £55m fine for its role in the Libor rate-rigging scandal.

Clearing & Settlement

All NASDAQ OMX Nordic and Baltic exchanges will implement T+2 standard settlement on 6 October 2014
NASDAQ OMX exchanges in Copenhagen, Helsinki and Stockholm have previously announced that they will introduce a T+2 standard settlement cycle as of October 6, 2014. The current standard settlement cycle is three days.

ASX Launches New Managed Funds Settlement Service
ASX has today officially launched its new managed funds settlement service – mFund.

BNP Paribas Securities Services And Euroclear Extend Partnership On Euroclear’s Collateral Highway To Four New Markets

Indexes & Products

Strategic European equities ETFs outperform, lure U.S. investors
Exchange-traded funds that choose stocks based on alternative growth, momentum and value factors are winning U.S. investors in the European equities market as they outperform the traditional market-capitalization weighted indexes.

BlackRock ETP Landscape: Record April With $33.5bn Inflows
ETP flows exceed $30bn in record April as economic outlook stabilizes after a volatile first quarter.

STOXX Introduces Chinese Version Of STOXX Name

Moscow Exchange Indices Monthly Review: April 2014

New OMX Helsinki Benchmark Portfolio Selected – The New Portfolio Of The OMX Helsinki Benchmark Index Will Become Effective On June 2, 2014

New OMX Stockholm Benchmark Portfolio Selected – The New Portfolio Of The OMX Stockholm Benchmark Index Will Become Effective On June 2, 2014

New OMX Copenhagen Benchmark Portfolio Selected – The New Portfolio Of The OMX Copenhagen Benchmark Index Will Become Effective On June 2, 2014


CFTC Amends Complaint against Banc de Binary, Ltd. to Charge Three Affiliated Corporate Entities with Violating the CFTC’s Ban on Trading Options Contracts Off-Exchange
CFTC Also Charges Oren Shabat Laurent as the Controlling Person of the Corporate Defendants and of the Banc de Binary Common Enterprise

Not All DoJ Punishments Are Created Equal, Just Ask Credit Suisse And UBS
Halah Touryalai – Forbes
UBS , Wegelin & Co and Credit Suisse are all Swiss banks that faced the wrath of the US Department of Justice over tax schemes, but not all punishment is created equal.

SEC ends probe of Chesapeake, ex-CEO McClendon; no action planned
Chesapeake Energy Corp said on Wednesday the U.S. Securities and Exchange Commission has ended its probe against the company and its former chief executive Aubrey McClendon.

Environmental & Energy

Siemens Buys Rolls-Royce Energy Assets to Catch Up With GE
Alex Webb, Bloomberg
Siemens AG agreed to buy some Rolls-Royce Holdings Plc energy assets for $1.3 billion and plans to list its hearing-aid unit as Europe’s largest engineering company aims to close a profitability gap with rivals General Electric Co. and ABB Ltd.

***LB: also in this story “Siemens will buy Rolls-Royce’s energy aero-derivative gas turbine and compressor business to strengthen its position in the power generation and oil and gas industries and manage its health-care business separately, the Munich-based company said in a statement yesterday.”

Kremlin says U.S. firms face pressure over St Petersburg forum-RIA
Many U.S. companies are coming under pressure over plans to attend the annual St. Petersburg International Economic Forum later this month, Kremlin spokesman Dmitry Peskov was quoted on Wednesday as saying.

Senator says Ukraine instability makes case for Keystone XL pipeline
Associated Press
The head of the Senate energy and natural resources committee said Tuesday that instability in Ukraine makes the case for building the Keystone XL oil pipeline in the United States.


Easing with Chinese characteristics
David Keohane | FT Alphaville
Even when a western government eases policy, the methods and transmission mechanisms involved aren’t that well understood. We’ll grant that things are even fiddlier in China.

Presentation By HKEx Co-Head Of Equity & FIC Bryan Chan And Chief Administrative Officer Monica Wong At A Media Workshop On Shanghai-Hong Kong Stock Connect

HKEx Monthly Market Highlights – April 2014

HKEx: On-Floor & Off-Floor Trading Statistics

Thai Bourse Launches ‘OppDay’ Application On iPhone For Opportunity Day

Frontier Markets

Jignesh Shah, ambitious man in savage hurry
Mumbai Mirror
Jignesh Shah, promoter of scamroiled National Spot Exchange Ltd, the man whose arrest 13,000 investors who lost money in the Rs. 5,600 crore scandal were baying for, was taken into custody by the police on Wednesday, nine months after the scandal broke.

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