Bits & Pieces
Today is ICAP Charity Day, one of the coolest initiatives in the industry, a day in which the broker group’s global offices donate 100 percent of their commissions to an assortment of charities, and a who’s who list of people work the phones. Over the past 22 years they have raised about $180 million. The tweets are still rolling in under the hashtag ICAPCharityDay, but it looks like the Duke and Duchess of Cambridge and international rugby great Lewis Moody were among those brokering swap deals today.
While on Twitter, we saw one from Eurex on the first month progress of its Mini-DAX contract, which looks to be doing well – 350,000 contracts and an ADV of 11,500. Open interest is climbing as well. #WhatTookYouSoLong
Yesterday, FOW hosted its annual international award show, with Singapore Exchange taking home “exchange of the year.” A number of the winners have releases sprinkled through today’s newsletter, but click HERE for the full rundown.
Our friends at Object Trading recently released a paper spotlighting the retrenchment of the sell-side and what that means for the buy-side and the industry at-large. According to CEO Steve Woodyatt, “Several high-profile firms have completely eliminated their clearing businesses, whilst nearly all have reviewed their offerings for profitability and to manage capital consumption. Buy-side firms are facing escalating costs and reduced services from their prime brokers, which is forcing them to re-evaluate and optimize their business strategy.” Read the summary and download the paper HERE.
FINCAD Webinar – Trading and Risk Technology: How to Drive Business Value with High-Performance Architecture
FINCAD will host a webinar on Thursday, Dec 10 at 11am Eastern (New York) and again on Wednesday, Dec 16 at 11am GMT (London)
Join Senior Risk Solutions Architect, Jay Bagchi, for a webinar presentation covering common trading and risk technology challenges, and how to overcome them, including:
To register, click HERE
Selling planetary survival on the sidelines of the Paris climate-change conference
ERIC REGULY – The Globe and Mail
Kaitlyn Lowder is talking about fish so stressed by climate change and acidifying oceans that they commit incest and have anxiety attacks.
***** Fish incest is a new one on me.
Star Wars: The Fan’s Guide to Investing
RCM’s Attain Alternatives Blog
We’re officially two weeks away from the premiere of, “Star Wars: The Force Awakens.” We couldn’t help ourselves but create an infographic for Star War fans to navigate the galaxy of investments.
***DA: Pretty clever, actually. Click the link to visit the Attain site or the infographic below to see it in full “force.”
Lee Hodgkinson, Euronext – Lessons from the 4-Minute Mile
“Everything is possible; nothing is easy.”
Roger Bannister, Clarence “Captain” Birdseye and Fedex founder Fred Smith all have one thing in common – they each proved that something previously declared “impossible” was not impossible, just really difficult. Whether it is the 4-minute mile, flash-frozen vegetables or getting a package delivered “absolutely, positively, anywhere overnight,” it can be done, says Euronext UK CEO Lee Hodgkinson in this MarketsWiki Education talk. He says that achieving the impossible requires focus, persistence and determination.
Nothing is impossible, says Hodgkinson, except running slowly while moving your arms really fast, and trying to eat three donuts in one minute without licking your lips. Not even Roger Bannister could achieve that feat.
Watch the video »
Ten EU countries agree on aspects of a financial-transaction tax
By Jan Strupczewski – Reuters
Ten euro zone countries agreed on Tuesday on some aspects of a harmonized tax on financial transactions and gave themselves until the middle of next year to reach agreement on remaining issues, including tax rates, the group said in a statement.
Upstart Picks Regulatory Fight With Toronto Stock Exchange Operator; Aequitas Innovations alleges TMX Group charges excessive stock-quote data fees
By BEN DUMMETT And JACQUIE MCNISH – WSJ
A new Canadian stock exchange is joining the listings turf war in North America, complaining to regulators that the country’s flagship exchange is taking advantage of its dominant share of trading volumes to thwart rivals.
The mystery of Bitcoin’s creator may have finally been solved
Timothy B. Lee – Vox
One of the biggest mysteries in the technology world is who invented Bitcoin, the cryptocurrency (and payment network) that’s now worth billions of dollars and could — according to supporters, at least — revolutionize the financial industry. Until now, the technology’s creator was known only as Satoshi Nakamoto, an online pseudonym whose offline persona was a tightly guarded secret.
Market reaction to US rate rise troubles Bank of England; Financial policy committee fears risks to stability from the emerging market reaction to next week’s Federal Reserve meeting
Jill Treanor – The Guardian
The Bank of England is on alert for the reaction in financial markets to an anticipated rise in US interest rates for the first time since the financial crisis.
Wall Street Mounts Final Push to Kill Tougher U.S. Broker Rules
David Michaels – Bloomberg
Congress weighing delay that gives firms more time to lobby
Amendment could be attached to bill funding federal government
Wall Street may get one more shot to derail rules championed by the White House that would put tighter restrictions on brokers who advise Americans on saving for retirement.
Police Raid Sydney Home of Man Who Reportedly Created Bitcoin
Edward Johnson – Bloomberg
Craig Wright identified by Wired as man behind cryptocurrency
Raid linked to ongoing tax office investigation, police say
Australian Federal Police raided the Sydney home of a man identified by Wired magazine as the possible creator of the cryptocurrency Bitcoin.
Bitcoin’s Creator Satoshi Nakamoto Is Probably This Unknown Australian Genius
EVEN AS HIS face towered 10 feet above the crowd at the Bitcoin Investor’s Conference in Las Vegas, Craig Steven Wright was, to most of the audience of crypto and finance geeks, a nobody.
The Italians fighting against an ‘invasion’ of palm oil; Calls for Italy to ban palm oil on health and environmental grounds are challenged by those who believe boycotts are not the best way forward
Sarah Hucal – The Guardian
Mozzarella, ciabatta, Parma ham … when considering Italy’s culinary landscape, palm oil is unlikely to feature high on the list – if at all. Yet the Mediterranean country is the EU’s second largest (pdf) importer of the oil, which some estimate is found in 90% of biscuits and baked goods in Italian supermarkets.
Former Jefferies Trader Wins Reversal of Fraud Conviction
Matt Robinson – Bloomberg
Appeals court decision could put brakes on U.S. crackdown
Reversal threatens cases involving traders at RBS, Nomura
A former Jefferies & Co. managing director accused of lying to customers about bond prices had his conviction overturned, setting back government efforts to hold individuals accountable for alleged wrongdoing on Wall Street.
When Can Bond Traders Lie to Their Customers?
By Matt Levine – Bloomberg
Jesse Litvak is a former Jefferies bond trader who lied to his customers. Specifically, he traded residential mortgage-backed securities, and he would tell buyers of those securities inventive little stories about the prices he had paid for them. So for instance, a customer came to him and asked to buy some bonds, he described for the customer “a fictional back-and-forth between himself and an unnamed, non-existent third-party seller,” and he ended by telling the customer that he’d paid $53.00 for the bonds. Then he charged the customer $53.25. The customer thought that Litvak had worked hard on his behalf and gotten paid a quarter for his efforts. But really Litvak had owned the bonds all along — he’d bought them days earlier for $51.25 — and made an undisclosed profit of $2.00.
Get Up To Speed On Regulation AT
Join FIA on December 16, 2015 for a webinar focused on educating attendees on the CFTC’s new proposed rules on automated trading (referred to as “Regulation AT”). The webinar will also identify the market participants impacted by Regulation AT.
Republicans slam U.S. financial stability council as secretive
Republican lawmakers on Tuesday lashed out at a major council of U.S. regulators charged with responding to threats to the financial system, saying the Financial Stability Oversight Council is secretive and unwilling to share information. Financial Services Committee Chairman Jeb Hensarling, of Texas, depicted the council, which includes the heads of the Securities and Exchange Commission and Federal Deposit Insurance Commission, as “powerful government administrators, secretive government meetings, arbitrary rules, and unchecked power to punish or reward.”
Shell may shift trading to US or Singapore over Mifid II
Oil major Royal Dutch Shell is exploring “all possible options” for compliance with Mifid II, including migrating trading activity to countries outside the EU, a company official says The trading arm of Royal Dutch Shell may relocate some activities to hubs outside the European Union, such as the US or Singapore, due to the looming costs of the EU’s new Markets in Financial Instruments Directive (Mifid II), according to an official with the UK- and Netherlands-based oil major.
Clearing houses and exchanges face new cyber rules
Clearing houses and exchanges will have to reinforce the infrastructure supporting Europe’s trading markets, after the European Union agreed new legislation governing the security of computer systems for critical industries.
The FCA sees improvements in suitability at wealth managers, but concerns remain
Wealth managers and private banks have made progress in demonstrating the suitability of their clients’ portfolios, a thematic review by the Financial Conduct Authority (FCA) has found.
Exchanges & Trading Facilities
Is Now a Good Time to Launch Stock Exchange in Brazil?
Americas Trading System Brasil CEO Alan Gandelman discusses opening a stock exchange in Brazil with Alix Steel and Scarlet Fu on “Bloomberg Markets.” (Source: Bloomberg)
Intercontinental Exchange Announces Expected Closing Date for Acquisition of Interactive Data Corporation
Intercontinental Exchange (NYSE: ICE), the leading global network of exchanges and clearing houses, today announced it has received all required regulatory approvals and now expects to close the acquisition of Interactive Data Corporation (Interactive Data) on or around December 14, 2015.
SGX “Trade with Caution” alerts to be more detailed and targeted
Singapore Exchange (SGX) will detail in “Trade with Caution (“TWC”)” alerts our concerns about unusual trading activities in a company’s stock. The alerts will be more targeted as they will be issued on a case-by-case basis instead of being automatically triggered by a company’s “not aware” reply to a public query from SGX. The alerts may also contain details gathered from SGX’s review of trading activities.
Trading Volumes Increase By 41 % As DGCX Celebrates 10th Anniversary
Overall monthly volume Growth of 41% in November 2015 over November 2014 ; Indian Rupee futures accounts for 31% of exchange traded volumes globally; Hydrocarbons segment grew by 72% in volumes over 2014; Exchange to launch Spot Gold contract on December 14 and Chinese Renminbi Futures on December 18, 2015
As the Dubai Gold & Commodities Exchange (DGCX) celebrated its 10th anniversary on 21st November, stellar volumes proved to be indicative of the Exchange’s success over the past decade. The Exchange recorded an overall monthly volume growth of 41% vs Nov 2014 and an incremental growth of 23% in volumes on year-on-year basis. Strong Open Interest and diversified growth across its asset classes has contributed to this month’s success with average daily open interest steadying at 96,011 contracts.
trueEX launches real-time swaps execution platform
The Trade News
trueFIX platform aims to offer real-time, automated trading of dollar, euro and sterling interest rate swaps.
Amendment to the market integrity clause
The Management Board of Eurex Deutschland and the Executive Board of Eurex Zürich AG proposed an amendment to the market integrity clause (§ 17 of the Exchange Rules for Eurex Deutschland and Eurex Zürich AG) to the Exchange Council of Eurex Deutschland and Board of Directors of Eurex Zürich in order to achieve a higher level of transparency and legal certainty in order to facilitate its application by the Market Participants.
Change in Senior Executives Approved
Reference is made to the announcement of Hong Kong Exchanges and Clearing Limited (“HKEx”) dated 18 November 2015 in relation to, among other items, appointment of Messrs Adrian Farnham and Iain Greig as Chief Executive and Chief Operating Officer respectively of LME
Clear Limited, an HKEx’s indirectly-held wholly-owned subsidiary.
Change in Senior Executive Approved
Reference is made to the announcement of Hong Kong Exchanges and Clearing Limited (“HKEx”) dated 18 November 2015 in relation to, among other items, appointment of Mr Trevor Spanner as HKEx’s Chief Operating Officer.
Arrangements for Adjustment of GCL-Poly Structured Products and Options
Hong Kong Exchanges and Clearing Limited (HKEx) has announced the arrangements for the adjustment to GCL-Poly Energy Holdings Ltd (GCL-Poly) structured products and options to account for GCL-Poly’s distribution of special dividend.
Hedge Funds & Managed Futures
Bill Gross’s Investors Pulled $74 Million From Fund in November
John Gittelsohn – Bloomberg
Redemptions follow Soros’s $490 million account withdrawal
Fund is down 1.8% this year, beating 56% of bond peers
Investors resumed redemptions from Bill Gross’s Janus Global Unconstrained Bond Fund in November, taking out about $74 million, the largest monthly outflow since the erstwhile bond king took over the fund last year.
US pension funds raise the bar in low carbon investment – FT.com
The falling oil price is helping fund managers deal with a difficult conundrum. Pressure to divest from polluting companies, especially those that deal in fossil fuels, is intense. But so is the pressure to maintain investment returns in an unforgiving investment environment.
Hedge fund hiring trends from Barclays report
Hedge funds are increasingly finding it difficult to hire good people. That’s according a big report on hedge fund hiring trends that Barclays sent out to clients last month.
Banks & Brokers
Banks tumble in list of best UK workplaces
Harriet Agnew, City Correspondent – FT
Online travel company Expedia climbed 24 places to top a list of employees’ 25 best places to work in the UK — a list on which only 10 companies from last year’s rankings featured again this year. Google was knocked from top spot into eighth place, and banks fell down the rankings.
Morgan Stanley closing base metals trading: source
U.S. investment bank Morgan Stanley will close its base metals trading desks globally as part of a plan to cut up to 25 percent of jobs in its fixed income and commodities division, a source at the company told Reuters on Tuesday.
Morgan Stanley Suspected Russian Hackers in Client-Data Breach; Former adviser who pleaded guilty to some charges maintains he never posted information online
By JUSTIN BAER – WSJ
Morgan Stanley suspected that Russian hackers stole client data from a former financial adviser who pleaded guilty to illegally accessing the bank’s computers and taking the information home with him.
Clearing & Settlement
G.H. Financials: Futures Commission Merchant of the Year – 2014 & 2015
G. H. Financials was named, for the second year in a row, as the Non-Bank Futures Commission Merchant of the Year 2015 by Futures and Options World (FOW) in their International Awards Ceremony in London (December 2015).
LEI codes await new mandates
One of the possible side effects of the expected one-year delay in the implementation of Europe’s landmark Markets in Financial Instruments Directive II (MiFID II), is that it may further postpone the industry’s incentive to adopt legal entity identifiers (LEIs) as a tool for assessing systemic risk.
Indexes & Products
Anglo American overtakes Glencore to become FTSE’s worst performer; Shares in Anglo American have fallen 76.5pc so far this year, compared with Glencore – down 74.65pc.
Tara Cunningham – Telegraph
Anglo American has overtaken its rival Glencore to become the FTSE 100’s worst performer so far this year, a day after it announced a radical restructuring plan as it battles the collapse in commodity prices.
FTSE Russell unveils new smart beta indices offering core US equity exposure
FTSE Russell, a global index provider, has launched a series of multi-factor smart beta indices which track a core allocation to US equities with a range of factor tilts designed to capture improved risk-adjusted returns. The rules-based design as these indices makes them an ideal candidate as the basis for index-tracking products such as exchange-traded funds.
The S&P 500 is your best weapon against rising rates next year
In a week that has so far wiped more than 1% off the S&P and Dow, here’s some food for thought from Barry Ritholtz. The Big Picture blogger asks what investors should expect after a flat year for U.S. markets. He says the bears take the view that a flat year is a sign that the nearly seven-year-old bull market is “old and tired,” and ready for a big pullback.
GMEX IRS Constant Maturity Index Wins Best Innovation By An Exchange For Regulatory Reform FOW International Awards
GMEX Exchange, a wholly owned subsidiary of GMEX Group is pleased to announce that the GMEX Interest Rate Swap Constant Maturity Index (“IRS CMI”) has been awarded Best Innovation by an Exchange for Regulatory Reform at 2015 Annual Futures and Options World (“FOW”) International awards.
Orc Recognized as Prop Traders’ First Choice at Annual FOW International Awards
Orc, the global market leader in electronic trading technology for listed derivatives, was named “Prop Traders’ ISV of the Year” at the FOW International Awards, presented by FOW yesterday in London.
Fidessa’s derivatives platform named Sell-side Trading System Of The Year at FOW awards
Scores hat-trick, winning for the third consecutive year
Fidessa group plc (LSE: FDSA) today announced that its derivatives trading platform has scooped the Sell-side Trading System Of The Year award at the FOW International Awards for the third year running. This latest accolade marks the end of a very successful year for Fidessa, during which it also won in the same category at FOW’s Asia Awards – again for the third year in succession.
The Role of Technology in Financial Markets Regulation
“The Role of Technology in Financial Markets Regulation,” an article authored by Steptoe partners Matthew Kulkin and Jason Weinstein, discusses the technologies used by financial regulators to efficiently and effectively provide market oversight and how technological innovation impacts financial services regulation.
Why publishers can’t bargain with Facebook and Google
Matt McAlister – The Guardian
It’s remarkable to me that more organisations don’t take advantage of perhaps the most powerful feature of the internet.
France Fines Euronext, Virtu for Stock Manipulation in 2009
John Detrixhe – Bloomberg
Euronext, Virtu each fined 5 million euros by the AMF
Euronext exchange plans to appeal the AMF’s decision
France’s regulator fined stock-exchange operator Euronext NV and high-speed trading firm Virtu Financial Inc. 5 million euros ($5.4 million) each for market manipulation in 2009.
ASIC bans Perth finance broker
ASIC has banned Perth-based finance broker Ms Rana Turkington Hepi from engaging in credit activities and providing financial services for eight years.
Etrade Australia Securities Limited pays $65,000 infringement notice penalty
Etrade Australia Securities Limited (Etrade) has paid a penalty of $65,000 to comply with an infringement notice given to it by the Markets Disciplinary Panel (MDP). The MDP found it had reason to believe that Etrade had contravened subsection 798H(1) of the Corporations Act 2001 (Corporations Act) by failing to comply with a ASIC market integrity rule (ASX Market) regarding the market for a Product not being both fair and orderly.
Australian Investment Exchange Limited pays $130,000 infringement notice penalty
Australian Investment Exchange Limited (AUSIEX) has paid a penalty of $130,000 to comply with an infringement notice given to it by the Markets Disciplinary Panel (MDP).
Environmental & Energy
First Trade In German Wind Index Futures Executed On Nasdaq Commodities
Nasdaq Commodities is pleased to announce that the first trade in the German Wind Index Futures was executed on launch day between EDF Trading Ltd and Energi Danmark A/S.
Vatican walls lit up to support climate change awareness – in pictures
The Holy See is lending itself to environmentalism with a special public art installation timed to coincide with the final stretch of climate negotiations in Paris. The facade of St Peter’s Basilica was turned into a massive backdrop for a photo light show by Obscura Digital about nature organised by humanitarian organisations titled Fiat Lux: Illuminating our Common Home
Action on climate change is the prudent course
I want first to state that I agree with many claims that Dave Majernik made in his letter (“Climate Change Is a Bogus Emergency,” Dec. 3). We have had natural disasters before the industrial age, and like him I favor clean air and water and conservation over wastefulness.
Why low oil prices are bad for financial markets; While fiscal math gets a boost, lower oil prices is bad news for the financial markets and in turn the global economy
Shishir Asthana – Business Standard
The Organization of Petroleum Exporting Countries (OPEC), the world’s biggest oil cartel, decided to not cut crude oil production, pushing oil prices lower to a seven year low. In a meeting held last Friday, OPEC decided to keep production unchanged as Iran maintained plans to boost its output when sanctions against it are lifted next year.
U.S. solar industry battles ‘white privilege’ image problem
BY NICHOLA GROOM – Reuters
Solar power companies have an image problem – and they are beginning to do something about it. Despite a sharp drop in the price of solar panels and innovative financing plans that have brought the technology to many middle income households over the past decade, it is still seen as a luxury only rich, mostly white, consumers can afford.
Greenpeace exposes sceptics hired to cast doubt on climate science; Sting operation uncovers two prominent climate sceptics available for hire by the hour to write reports on the benefits of rising CO2 levels and coal
Suzanne Goldenberg US environment correspondent – The Guardian
An undercover sting by Greenpeace has revealed that two prominent climate sceptics were available for hire by the hour to write reports casting doubt on the dangers posed by global warming.
Hong Kong can become a regional commodity hub, says Charles Li
A well developed commodity market is key to the globalization of the Chinese renminbi, Hong Kong Exchanges and Clearing Ltd. (HKEx, 00388.HK) chief executive Charles Li says.
Studying in the US makes the Chinese more appreciative of China
Aamna Mohdin – Quartz
The number of international students at US universities has hit an all-time high and the biggest group—around 31%—is Chinese students, a number that has jumped fivefold since 2000. As the number of Chinese nationals studying in the world’s most powerful democracy increases, what impact does this have on their views of their home country?
‘CBOE Options Institute At SGX’ Launches In Singapore December 9
The Chicago Board Options Exchange® (CBOE®) today launched the first international extension of the world-renowned CBOE Options Institute at Singapore Exchange (SGX) in a ceremony attended by CBOE Chief Executive Officer Edward T. Tilly and SGX Chief Executive Officer Loh Boon Chye.
The Last Frontier: Myanmar’s 22-Year Quest for a Stock Exchange
Anna Kitanaka – Bloomberg
Bourse opens on Wednesday with trading set to begin in 2016
Myanmar is working with Daiwa, JPX as economy opens up
Starting a stock market is hard. Just ask Ryota Sugishita.
Myanmar Stock Exchange Opens, With No Trading, To Speed Up Market Development
By Coco Alcuaz – IBTimes
Myanmar’s new stock exchange came into existence Wednesday, but there are no listed companies or brokers and therefore no trading as well. When trading begins, foreigners won’t be allowed to participate. Proponents say it’s nevertheless important to start, to accelerate economic change alongside the country’s expected shift to a democratic government next year. In another sign of change, the U.S. on Monday lifted for six months its ban on U.S. companies using Myanmar’s ports.
Ted Cruz, the Fed, and the folly of blaming the government for everything
Jeff Spross – The Week
For a second there, Ted Cruz almost sounded like a lefty.