First Read

A Wrinkle in the OCC’s Capital Plan?
Doug Ashburn – JLN

Friday was the last day to file a comment letter to the Securities and Exchange Commission on a capital raising plan, and two of the 12 U.S. options exchanges have voiced an objection.

On January 26, 2016, the SEC published and sent out for comment a proposed rule change at the Options Clearing Corp. that would allow it to raise its target capital reserve from $25 million to $247 million. Under the proposal, the five legacy “equity holder” exchanges – CBOE, ISE, NASDAQ OMX PHLX, and the two NYSE exchanges (NYSE MKT and NYSE Arca) – would augment their capital contributions up to the new buffer, in exchange for a perpetual dividend from the OCC from its clearing fees. The remaining options exchanges – BATS Options, NASDAQ Options, NASDAQ BX, BOX, C2, Gemini, and MIAX, are non-equity holders.

The dual-class system dates back to 2002, when OCC amended its rules to remove the ownership requirement for firms for which it provides clearing services. It should be noted that, of the seven non-equity holders, four of them – C2, NASDAQ Options, NASDAQ BX and Gemini – are all subsidiaries of equity holder exchanges. From a corporate level, that leaves BOX, BATS and MIAX as the possible odd-men out, as non-subsidiaries.

In response to the proposed change, two of the non-equity exchanges – BOX and BATS – filed comment letters claiming the rule would put them at a competitive disadvantage, as clearing fees will be raised across the board, with the five equity-holder exchanges earning an annual dividend that could be used to pay down their respective contributions.

Read the BOX Letter
Read the BATS Letter
Read the rest of the article at JohnLothianNews.com

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CFTC Staff to Host Public Roundtable on Recovery and Orderly Wind-Down of Derivatives Clearing Organizations
CFTC
Staff of the U.S. Commodity Futures Trading Commission (CFTC) will hold a public roundtable on March 5, 2015, from 9:00 a.m. to 5:00 p.m., to discuss issues related to recovery and orderly wind-down of Derivatives Clearing Organizations (DCOs). The goal of this roundtable is to gather views from a variety of stakeholders, including DCOs, their clearing members (futures commission merchants), and the customers of their clearing members (including money managers, end-users, and others).
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***** For the record, it is not a round table and no one named Arthur or Guinevere were to be found at the last one.

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Uniting Europe’s Financial Markets
New York Times
The leaders who created the European Union hoped that binding together their economies would increase prosperity and reduce the chance of conflict. But the union is far from complete, especially in the financial sector.
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***** A job half done is a job not done.

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CME options traders shout on alone
By Philip Stafford in London and Neil Munshi in Chicago, FT
CME Group is consigning its futures trading floors, once home to thousands of noisy traders, to history. But one section of the floor will shout on: the options pits.
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***** Don’t worry, the futures traders will still be shouting, just not in the exchange trading pits.

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Things to Know About Spoofing in Financial Markets
WSJ
“Spoofing” is an illegal type of market manipulation that works like bluffing: A trader places big orders for stocks, bonds or futures to get others to think the price is going up or down. Then, in the blink of an eye, the spoofer cancels those orders and puts in opposite orders to take advantage of those traders. Spoofing can earn a big payoff but can undermine confidence in the markets and hurt other traders, The Wall Street Journal reports.
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***** When I first created a page for “spoofing” in MarketsWiki following the passage of Dodd-Frank, there were only 2 pages on the Internet the referred to the term and one of them was about the passage of the bill. We have come a long way since then.

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Use a trick from behavioural economics to lose weight
Charles Wallace, FT
David Ahn, a specialist in endocrinology in San Diego, California, struggled with weight issues until he stumbled on an app that uses a concept borrowed from behavioural economics to keep him visiting the gym. Dr Ahn says he set the app, called Pact, to fine himself $5 every time he missed a scheduled visit to the gym. In the past two and a half years, Dr Anh has managed to lose 18lbs (8kg), which he attributes to the success of the Pact program, which also gets him to track his calorie intake.
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***** If I fined myself $5 everytime I missed going to the gym, I might just go to the gym more.

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Internal Affairs: NFA CEO Dan Roth Highlights Changes in the Wake of MF Global and Peregrine Bankruptcies
JohnLothianNews.com

After the twin scandals of MF Global and Peregrine Financial rocked the futures industry in 2011 and 2012, the National Futures Association, underwent a review, not only of its internal procedures, but also of its rules. In Part One of this two-part John Lothian News exclusive, NFA CEO Dan Roth points to a study conducted by the Berkeley Research Group of NFA’s audit procedures, and he reviews the changes made to the way the agency audits, hires employees, and delivers its message to NFA members.
Watch the video »
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MarketsWiki

MarketsWiki Page of the Day
Christopher K. Hehmeyer

MarketsWiki Recent Updates

People

Michael McClain; Michael E. Cahill; David S. Goone; Christopher K. Hehmeyer; Ivers W. Riley; Jim Gorman

Companies, Organizations and Groups

OCC; IntercontinentalExchange Group Inc.; HTG Capital Partners, LLC; Ketchum Trading, LLC; London Metal Exchange; BGC Partners, Inc.; GFI Group Inc

Miscellaneous

Implied volatility; Volatility

Statistics

59,042,832 pages viewed, 8,154 articles, 189,798 edits
MarketsWiki Statistics

Lead Stories

As ‘Spoof’ Trading Persists, Regulators Clamp Down; Bluffing Tactic That Dodd-Frank Banned in 2010 Can Distort Markets
By Bradley Hope, WSJ
One June morning in 2012, a college dropout whom securities traders call “The Russian” logged on to his computer and began trading Brent-crude futures on a London exchange from his skyscraper office here.
jlne.ws/1JCydiz

US launches crackdown on pension adviser conflicts
Gina Chon and Barney Jopson in Washington, FT
President Barack Obama is launching a crackdown on the US pensions industry, where the White House says Americans are losing billions of dollars at the hands of advisers who put their own profits before clients’ interests.
jlne.ws/1EHWgGc

Cyber criminals target trading algorithms
Judith Evans, FT
In-house trading algorithms, the life blood of quantitative hedge funds and high-frequency traders, are being targeted by cyber criminals wanting to sell them on to unscrupulous traders. Security experts say there has been a spate of targeted attacks aimed at stealing the code that underlies trading strategies, as hackers home in on financial companies’ intellectual property.
jlne.ws/17MNETt

Virtu Celebrates Another Year Without a Single Day of Losses
Bloomberg Business
High-frequency trading firm Virtu Financial Inc. reported another year without a single day of losses, extending a near-perfect streak stretching back to 2009 that contrasts with dwindling profits at competitors.
jlne.ws/1LuFdcN

Yellen Faces Congress Amid Direst Threat to Fed Since Dodd-Frank
by Jeff Kearns, Bloomberg
Chair Janet Yellen testifies before Congress this week with the Federal Reserve facing its gravest political threat since the drafters of the Dodd-Frank act tried to strip it of its supervisory powers.
jlne.ws/1EmHjeM

Capital Rules Aren’t the Only Reason Banking Is Boring
By Matt Levine, Bloomberg
This morning I proposed a simple speculative model of how banking has been transformed. In this model, the business hasn’t changed much, but higher capital requirements have made it less profitable for shareholders: You might make the same amount of money doing the same stuff, but you have to share it among more shareholders. This obviously wasn’t the whole story — banks are also making less money and doing different stuff — but I suggested that it had some explanatory power.
jlne.ws/1Bd1CvM

TABB Group Sees First-Mover Advantage in Innovation and Migration for Firms in Coming Post-Dodd-Frank Period
Business Wire
While the past several years of regulatory uncertainty have frustrated, if not left, the derivatives industry treading water, capital markets research firm TABB Group, in new research, believes the coming post-Dodd-Frank period portends to be a watershed moment in innovation and migration for many capital markets firms.
jlne.ws/1wfCW3T

Shanghai exchange to open doors to foreign short sellers
Tom Mitchell in Beijing, FT
Foreign investors will be able to short Chinese shares next month for the first time under the Shanghai-Hong Kong Stock Connect programme, in the latest move by China’s regulators to open up the country’s stock market.
jlne.ws/1zzhrXm

Sir Howard Davies set to be appointed RBS chairman
Martin Arnold and Patrick Jenkins, FT
Sir Howard Davies is set to be the next chairman of Royal Bank of Scotland, replacing the outgoing Sir Philip Hampton.
jlne.ws/1Lur67d

Regulatory

SEC Argues in Second Circuit Amicus Brief That Dodd-Frank Protects Inside Whistleblowers
By Michael S. Gordon, Margaret J. McQuade, The National Law Review
On February 6, the Securities Exchange Commission filed an amicus brief advising the United States Court of Appeals for the Second Circuit that the whistleblower protections of the Dodd-Frank Wall Street Reform and Consumer Protection Act cover individuals who report wrongdoing internally before reporting to the SEC. The amicus brief was filed in support of appellant Daniel Berman, a former employee at marketing firm Neo@Oglivy LLC, who was fired after reporting accounting violations to his supervisors. Because Berman did not notify the SEC of wrongdoing until six months after his termination, the lower court found that he was not protected by the Dodd-Frank Act’s anti-retaliation provisions.
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What Threats Can Muffle a Corporate Action? FINRA May Rely on SEC Enforcement Proceedings
By Lawrence S. Elbaum, Tracey L Silver, The National Law Review
In a pair of recent opinions, the Securities and Exchange Commission (SEC) found that FINRA acted within the scope of its rules and governing statutory scheme in refusing to announce corporate actions for companies whose executives were subjects of regulatory actions alleging securities laws violations.
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Self-Regulatory Organization (SRO) Rulemaking and National Market System (NMS) Plans
SEC

  • BOX: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Extend the Pilot Program that Suspends Certain Obvious Error Provisions During Limit Up-Limit Down States in Securities That Underlie Options Traded on the Exchange (Release No. 34-74306; File No. SR-BOX-2015-13; February 19, 2015); see also Exhibit 5

 

  • C2: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Exchange Rule 6.15 (Release No. 34-74313; File No. SR-C2-2015-003; February 19, 2015); see also Exhibit 5

 

  • CBOE: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Exchange Rule 6.25 (Release No. 34-74312; File No. SR-CBOE-2015-18; February 19, 2015); see also Exhibit 5

 

  • ISEGemini: Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Extend the Limit Up-Limit Down Obvious Error Pilot (Release No. 34-74311; File No. SR-ISEGemini-2015-05; February 19, 2015); see also Exhibit 5

 

  • MIAX: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Extend the Pilot Period Applicable to Rule 530 Relating to Limit Up/Limit Down (Release No. 34-74307; File No. SR-MIAX-2015-11; February 19, 2015); see also Exhibit 5

 

  • MIAX: Order Disapproving Proposed Rule Changes to List and Trade Options on Shares of the iShares ETFs and Market Vectors ETFs (Release No. 34-74304; File Nos. SR-MIAX-2014-30, SR-MIAX-2014-39; February 19, 2015)

 

  • MIAX: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Amend Exchange Rule 4 (Release No. 34-74301; File No. SR-MIAX-2015-10; February 19, 2015); see also Exhibit 5

 

  • NASDAQ: Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Amend Chapter V, Regulation of Trading on NOM, to Extend the Pilot Program Under Section 3(d)(iv) (Release No. 34-74336; File No. SR-NASDAQ-2015-016); see also Exhibit 5

 

  • NASDAQ: Order Granting Approval of Proposed Rule Change Relating to the Listing and Trading of the Shares of the Tuttle Tactical Management U.S. Core ETF of ETFis Series Trust I (“Release No. 34-74303; File No. SR-NASDAQ-2014-127; February 19, 2015”)

 

  • NASDAQ OMX BX: Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Amend the BX Options Rules to Extend the Pilot Program Under Chapter V, Section 3(d)(iv) (Release No. 34-74334; File No. SR-BX-2015-012); see also Exhibit 5

 

  • NASDAQ OMX BX: Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Modify and Reorganize Chapter VI (Trading Systems), Section 8 (BX Opening and Halt Cross) of the Exchange’s Options Rules (Release No. 34-74310; File No. SR-BX-2015-010; February 19, 2015)

 

  • NMS: Order Approving the Eighth Amendment to the National Market System Plan to Address Extraordinary Market Volatility by BATS Exchange, Inc., BATS Y-Exchange, Inc., Chicago Board Options Exchange, Incorporated, Chicago Stock Exchange, Inc., EDGA Exchange, Inc., EDGX Exchange, Inc., Financial Industry Regulatory Authority, Inc., NASDAQ OMX BX, Inc., NASDAQ OMX PHLX LLC, The Nasdaq Stock Market LLC, National Stock Exchange, Inc., New York Stock Exchange LLC, NYSE MKT LLC, and NYSE Arca, Inc. (Release No. 34-74323; File No. 4-631; February 19, 2015)

 

  • NYSE Arca: Notice of Filing and Immediate Effectiveness of Proposed Rule Change Extending the Pilot Period Applicable to Rule 6.65A(c), Obvious and Catastrophic Errors, Until October 23, 2015 (Release No. 34-74308; File No. SR-NYSEArca-2015-07; February 19, 2015); see also Exhibit 5

 

  • NYSEMKT: Notice of Filing and Immediate Effectiveness of Proposed Rule Change Extending the Pilot Period Applicable to Rule 953.1NY(c), Obvious and Catastrophic Errors, Until October 23, 2015 (Release No. 34-74309; File No. SR-NYSEMKT-2015-10; February 19, 2015); see also Exhibit 5

 

  • OCC: Order Approving Proposed Rule Change to Clarify that OCC would not Treat a Futures Transaction that is an Exchange-for-Physical or Block Trade as a Non-Competitively Executed Trade if the Exchange on Which Such Trade is Executed has Provided OCC with Representations That it Has Policies or Procedures Requiring That Such Trades be Executed at Reasonable Prices and That Such Price is Validated by the Exchange (Release No. 34-74302; File No. SR-OCC-2014-23; February 19, 2015)

 

  • Phlx: Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Extend the Pilot Program Regarding Exchange Rule 1047(f)(v) (Release No. 34-74337; File No. SR-Phlx-2015-19); see also Exhibit 5

jlne.ws/1eCTnOv

Speeches
SEC

  • Chairman’s Address at SEC Speaks 2015, by Chair Mary Jo White

 

  • Remarks at the “SEC Speaks” Conference 2015: A Fair, Orderly, and Efficient SEC, by Commissioner Michael S. Piwowar, in Washington, D.C.

 

  • Remarks at the “SEC Speaks” Conference, by Commissioner Kara M. Stein, in Washington, D.C.

 

  • Remarks at The SEC Speaks in 2015, by Commissioner Daniel M. Gallagher, in Washington, D.C.

 

  • Setting Forth Goals for 2015: Address to Practising Law Institute’s SEC Speaks in 2015 Program, by Commissioner Luis A. Aguilar, in Washington, D.C.

 

  • Effective Disclosure for the 21st Century Investor, by Rick A. Fleming, Investor Advocate, in Washington, D.C.

jlne.ws/1eCTnOv

UK Listing Authority fees: covering the cost of regulation
UK FCA
As the UK Listing Authority (UKLA), we oversee the listing, transparency and prospectus regimes. In particular, we maintain the Official List of securities and enforces compliance with the Disclosure and Transparency Rules (DTR), the Prospectus Rules and the Listing Rules.
jlne.ws/1ABuvym

Approach to non-executive directors in banking and Solvency II firms & Application of the presumption of responsibility to Senior Managers in banking firms
UK FCA
This paper sets out the our revised approach to independent non-executive directors (NEDs) in UK banks, building societies, credit unions and PRA-designated investment firms (relevant authorised persons) and Solvency II firms.
jlne.ws/1DNw7Y2

Exchanges & Trading Facilities

CBOE Named “Best Options Exchange” at the Markets Choice Awards
CBOE
The Chicago Board Options Exchange® (CBOE®) announced that the exchange was named “Best Options Exchange” for the second consecutive year at the third annual Markets Media Markets Choice Awards last night in New York City.
jlne.ws/1Bw6cVh

Transition of Certain Regulatory Services Performed on Behalf of the Exchanges by FINRA
CBOE
On December 19, 2014, CBOE and C2 (collectively the “Exchanges”) signed an agreement with FINRA under which FINRA began performing certain regulatory services on behalf of the
Exchanges beginning January 1, 2015.
jlne.ws/1vs517c

Trader E-News
CBOE
jlne.ws/18fQ4uV

CBOE VIX Indicative Bid Index (VWB) and CBOE VIX Indicative Ask Index (VWA) to Include SPX Weeklys Beginning February 23, 2015
CBOE
jlne.ws/1LxtjRt

Markets Media Magazine Names CME Group “Best Global Exchange”
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced the company was named “Best Global Exchange” by Markets Media 2015 Markets Choice Awards. The award ceremony, held last night in New York, recognized CME Group’s excellence in diverse and innovative new products, client service and education, and technology design and execution as voted by peers and customers.
jlne.ws/1vs5pCS

Pressure builds to move more foreign currency trading onto exchanges
Reuter
International regulators struggling to rein in the $5 trillion-a-day global foreign exchange market are finally finding some support from asset managers warming to the idea of moving more trading on to exchanges.
jlne.ws/1LuziEE

NOTICE OF DISCIPLINARY ACTION
CME Group
NEWEDGE USA LLC (now known as SG Americas Securities, LLC)
PENALTY:In accordance with the offer of settlement, the Panel fined Newedge $1,750,000 in connection with this case and companion case COMEX 11-8619-BC ($650,000 of which is allocated to NYMEX).
jlne.ws/1Fj9rxa

NOTICE OF DISCIPLINARY ACTION
CME Group
MAREX SPECTRON INTERNATIONAL LIMITED
PENALTY:In accordance with the settlement offer, the Panel ordered MSIL to pay a fine to the Exchange in the amount of $25,000.
jlne.ws/1D34juJ

NOTICE OF DISCIPLINARY ACTION
CME Group
MAREX SPECTRON ASIA PTE LTD.
jlne.ws/1Fj9NnD

PENALTY:In accordance with the settlement offer, the Panel ordered Marex Spectron Asia to pay a fine to the Exchange in the amount of $7,500.

NOTICE OF DISCIPLINARY ACTION
CME Group
Canadian Imperial Bank of Commerce
PENALTY:In accordance with the settlement offer, the Panel ordered CIBC to pay a fine to the Exchange in the amount of $15,000.
jlne.ws/1BFQ2sF

NOTICE OF DISCIPLINARY ACTION
CME Group
Advantage Futures, LLC
PENALTY: In accordance with the settlement offer, the Panel ordered Advantage to pay a fine to the Exchange in the amount of $10,000.
jlne.ws/1BddP3r

NOTICE OF DISCIPLINARY ACTION
CME Group
JEFFERIES BACHE FINANCIAL SERVICES INC.
PENALTY: In accordance with the settlement offer, the Panel ordered Jefferies to pay a fine to the Exchange in the amount of $40,000.
jlne.ws/1BFQGWZ

NOTICE OF DISCIPLINARY ACTION
CME Group
UBS AG
PENALTY: In accordance with the settlement offer, the Panel ordered UBS to pay a fine to the Exchange in the amount of $15,000.
jlne.ws/1FOmGtt

NOTICE OF DISCIPLINARY ACTION
CME Group
NEWEDGE USA LLC (now known as SG Americas Securities, LLC)
PENALTY: In accordance with the offer of settlement, the Panel fined Newedge $1,750,000 in connection with this case and companion case NYMEX 11-8619-BC ($1,100,000 of which is allocated to COMEX).
jlne.ws/1w2e4a2

CME Group Notices
Performance Bond Requirements: Refined Products Outrights and Intra-Commodity Spread Charges – February 23, 2015 20 Feb 2015
Last Delivery Date change for March 2015 2-Yr (TUH5), 3-Yr (3YRH5) and 5-Yr (FVH5) Treasury Note Futures Contracts
CME Group Delivery Dates for March 2015 – Last Delivery Date change for the March 2015 2yr/3yr/5yr Treasury Note contracts
New Product Summary: Trade Month Benzene Futures – March 9, 2015 20 Feb 2015
Expansion of Listing Schedule for the Australian Coking Coal (Platts) Low Vol Futures Contract
jlne.ws/1yiRpvt

Hedge Funds & Managed Futures

AngloGold Vows to Only Sell Mines for ‘Full Value,’ CEO Says
by Kevin Crowley, Bloomberg
AngloGold Ashanti Ltd., the world’s third-largest gold miner, is under no pressure to sell assets and will only do so for “full value,” Chief Executive Officer Srinivasan Venkatakrishnan said.
jlne.ws/1w25loa

U.K. Government Cuts Lloyds Stake in $769 Million Share Sale
by Ambereen Choudhury, Richard Partington, Bloomberg
The U.K. government sold a further 500 million pounds ($769 million) of Lloyds Banking Group Plc shares as part of a plan to reduce its stake in the country’s largest mortgage lender in the run-up to May’s general election.
jlne.ws/1DcSmp5

U.S. Banks Hoard $2 Trillion of Ultra-Safe Bonds
by Liz McCormick, Daniel Kruger, Bloomberg
What do America’s banks know about the state of the U.S. economy that has them hoarding ultra-safe bonds?
jlne.ws/1BFFsSz

Carlyle Hedge-Fund Unit Has Big Outflow; Withdrawals follow losses due to investments in Fannie Mae, Freddie Mac
By Juliet Chung and Laurence Fletcher, WSJ
Investors have pulled about $2.5 billion since October from a hedge-fund firm owned by Carlyle Group LP after an outsize bet on mortgage giants Fannie Mae and Freddie Mac led to steep losses last year, people familiar with the matter said.
jlne.ws/17pZQJU

The fall of the female fund manager
Chris Newlands, FT
Women are ‘dangerously outnumbered’ in asset management, says Chris Newlands
Endangered species. That is the term being used to describe female portfolio managers.
jlne.ws/1vrZDRN

Getting to the bottom of hedge fund fees
Stephen Foley, FT
Funds are beginning to react to pressure to charge less
Last year was another dismal one for hedge funds, as returns failed once again to live up to expectations and heavyweight institutional investors led by Calpers, the giant California pension fund, reconsidered whether managers were worth their high fees.
jlne.ws/1B4Uz6w

Banks & Brokers

Goldman Sachs Raises Top End of Legal Loss Range to $3 Billion; Bank’s range of possible legal losses had been $2.5 billion in November
By Justin Baer, WSJ
Goldman Sachs Group Inc. raised the top end on its range of “reasonably possible” legal losses to about $3 billion, the Wall Street firm said Monday in a regulatory filing.
jlne.ws/1Fj07tc

HSBC shares drop after full-year profits fall
Martin Arnold, Banking Editor, FT
HSBC has added a sharp fall in annual profits to the list of challenges it faces, as its chairman apologised for a Swiss tax evasion scandal that has left its chief executive facing questions about his personal finances.
jlne.ws/1w20MKC

Barclays Chairman David Walker to Join Hedge Fund Winton Capital
by Lindsay Fortado, Bloomberg
David Walker, the chairman of Barclays Plc, will leave the bank in April to take on the same role at Winton Capital Management, a London-based hedge fund that manages $28 billion, as it seeks to become a global asset manager.
jlne.ws/1zzndbH

Goldman Made $10 Billion From Fund Stakes in Last 5 Years
by Michael J Moore, Bloomberg
Goldman Sachs Group Inc. generated about $10 billion over the last five years from investments in funds, holdings that the firm is required to scale back because of the Volcker Rule.
jlne.ws/17MVDji

HSBC says Swiss scandal has brought ‘shame’ on bank
By Steve Slater and Matt Scuffham, Reuters
HSBC (HSBA.L) reported a 17 percent fall in annual pretax profit and cut its profitability target, saying allegations its Swiss business had helped customers to dodge taxes had brought shame on the bank.
jlne.ws/1BFVlbs

Clearing & Settlement

EU’s top court to rule on ECB challenge to UK clearing on March 4
Euronews
The EU’s top court rules next month on a battle between the European Central Bank and Britain whose outcome could reduce London’s role as the bloc’s top financial centre, lawyers said. The ECB says clearing houses – third parties standing between two sides of a trade to ensure its completion – that process more than 5 percent of any euro-denominated security should be based in the single currency area.
jlne.ws/1Luz3cH

BME sets Q3 launch date for swap clearing
Futures & Options World
Spanish clearing house BME Clearing has said it is set to launch interest rate swaps (IRS) in the third quarter of 2015 subject to authorisation. BME Clearing, a subsidiary of Spanish exchange BME, said it will open a new division called BME Clearing over-the-counter (OTC) IRS in the third quarter launch to coincide with the expected entry into force of Europe’s swap clearing obligations.
jlne.ws/1LuzqE6

Indexes & Products

A New ETF for Combating Rising Rates
By Tom Lydon, ETF Trends
Although interest rates remain near historic lows and the Federal Reserve appears to be taking a patient approach to raising rates, but that has not stopped investors from scouring the universe of exchange traded funds for rising rates protection.
jlne.ws/1Luvxz2

Growing Selection in Liquid-Alt ETFs
ThinkAdvisor
Liquid-alternative exchange traded funds (ETFs) comprise only a small part of the ETF universe. Estimated assets under management for the group are just about $2 billion, with roughly $1 billion of that total in the IQ Hedged Multi-Strategy Tracker ETF (QAI) from IndexIQ.
jlne.ws/1LuAFmE

Russell sale by the numbers
Pensions & Investments
So far, the London Stock Exchange Group appears to be preparing for an auction process, shopping the deal to nearly 100 potential buyers in hopes of gaining the highest offer possible. Sources say that LSE hopes to get $1.2 billion to $1.5 billion for the portions of Russell Investments’ business it is selling.
jlne.ws/1wfDRBf

Uncertainty, a Four Letter Word for the Municipal Bond Market
ETF Trends
The uncertainty of the future of Puerto Rico municipal bonds continues to weigh on the municipal bond market. Bonds in the S&P Municipal Bond Puerto Rico Index have settled into an average price of just over 50 cents on the dollar with the low point of 47.27 on July 8th 2014.
jlne.ws/1LuB4Wb

TA-25 Index Futures: quanto structure eliminates currency risk for U.S. dollar investors
Eurex
Since June 2014 Eurex Exchange, in cooperation with the Tel-Aviv Stock Exchange, lists an index futures contract on the Israeli blue chip index TA-25. With the new contract, Eurex Exchange has expanded its equity-based regional coverage to the Middle East. It allows you to easily access the Israeli market during Israeli, European and U.S. trading hours. What’s more, our TA-25 Index Futures have been designed to eliminate currency risk.
jlne.ws/1B4XEnk

Technology

Pandit Says Financial Technology Changes Aiding Startups
Bloomberg Business
Vikram Pandit, the former chief executive officer of Citigroup Inc., said the global financial system is facing another round of changes as new technology allows startups to compete with large banks.
jlne.ws/1LuCYWX

The LEI’s Next Frontier: Quality
WatersTechnology
The legal entity identifier stage has been set, and registrations have been growing. But the quality of LEI data being generated is most important to its continued success
jlne.ws/1LuzN1s

Why I am stepping out of the debate on women in technology
The Washington Post
I started advocating for women in engineering in 2006 when my dean at Duke’s Pratt School of Engineering, Kristina Johnson, made me aware of the declining numbers of women entering the field. As a former tech entrepreneur, I found the situation alarming. I had spent the last few years researching how education, immigration, and entrepreneurship drive innovation. The fact that half of our population was being left out of the fields most important to our future seemed deeply wrong to me.
jlne.ws/1wfF77q

Here’s why fintech startups are paving the way to gold
Ventureburn
Fintech is on fire. Better, it’s white hot. According to an oft-cited study released by Accenture, global investment in financial technology ventures tripled from US$928-million to US$2.97-billion between 2008 and 2013. This figure is expected to snowball to a whopping US$6 to 8 billion by 2018.
jlne.ws/1CTKN6x

Enforcement

HSBC may face extra $1 billion in FX fines, U.S. compensation costs
Reuters
HSBC Holdings Plc has set aside $550 million more to cover potential fines for alleged manipulation of foreign exchange markets and warned it could face a $500 million bill to compensate U.S. customers sold debt protection products.
jlne.ws/1JCuMIA

Environmental & Energy

China Outlines Plans for its Carbon Trading Markets
ByMichael Fosh, Charles Stone, Katherine Yang, Peter Zaman – JDSupra
The Climate Department of China’s National Development and Reform Commission (NDRC) recently published an article entitled “Regarding the Fundamental Conditions and Operational Thinking Behind the Promotion and Establishment of the National Carbon Emissions Rights Trading Market” (National Market Plan).
jlne.ws/1a3iBVe

Natalie Portman, Darren Aronofsky urge Harvard to divest from fossil fuels
By Laura Barron-Lopez – The Hill
A group of high-profile Harvard alumni pressed their alma mater to divest from fossil fuels on Friday.
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Apple to invest 1.7bn euros in European green data centres
By Will Nichols – BusinessGreen
Apple plans to invest 1.7bn euros in two European data centres that will run on 100 per cent renewable energy.
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Raise the Gas Tax – 50 Times
Bloomberg (Opinion)
A political development of actual importance is occurring in Iowa this month: Democrats and Republicans are proposing to increase the state’s gas tax. Not only is this a rational way to raise revenue to repair bridges and roads, it’s also a sensible response to the federal government’s abdication of the task.
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Asia-Pacific

Lee Kuan Yew in intensive care
Jeremy Grant, FT
Lee Kuan Yew, founding father of modern Singapore, is in intensive care on mechanical ventilation in hospital, after the 91-year old was admitted earlier this month for severe pneumonia, the office of the Asian city-state’s prime minister said. The condition of Mr Lee, who as Singapore’s first prime minister ruled the island nation from 1959 for three decades, had stabilised. He was “conscious and lightly sedated”.
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Commodities explained: China’s new normal
By Henry Sanderson, FT
As the Chinese return from their New Year celebrations, commodities traders and industry executives will be wondering what the year of the sheep holds for the sector.
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Frontier Markets

Azerbaijan devalues currency By 33.5%
By MarketWatch
The Central Bank of Azerbaijan depreciated the country’s currency by 33.5% against the U.S. dollar on Saturday, the bank said in a statement.
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Securities and Exchange Board of India Notices
Adjudication order against Pertech Computers Limited
Shree Shubham Logistics Limited
Uniply Industries Limited
Spenta International Limited – Post Offer Public Announcement
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How you can use derivatives
Lokeshwarri SK, The Hindu Business Line
Derivatives can be used to protect your wealth against swings in interest rates, the rupee or stock markets
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Did NSEL brokers take the system for a ride?; Data suggest they modified clients’ code 300,000 times
Rajesh Bhayani, Business Standard
As cases related to the crisis-ridden National Spot Exchange (NSEL) progress, a fresh set of information suggest NSEL brokers might have been taking the system for a ride. According to the NSEL data, brokers modified client codes as many as 300,000 times, which is very unusual. Client codes are changed after the deal on the exchange is done in one name and then transferred in another name and allowed only for bona fide mistakes.
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Miscellaneous

 

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