First Read

Gary Katz

Options’ Glass is Half Full: Gary Katz Says Industry is Doing Well
Gary Katz, president and CEO of the International Securities Exchange (ISE), has seen the options markets change dramatically since he co-founded the all-electronic options exchange in 2000. His exchange launched ISE Gemini in August, representing the 12th US options exchange. Katz sat down with JLN editor-in-chief Jim Kharouf to talk about where the US equity options business is today, why almost flat volumes isn’t a bad thing, and how this industry can keep growing, even in a low volatility, low interest rate environment.
Watch the video »

**Don’t miss: Born Under a Good Sign: Gary Katz Says ISE Gemini Off to Fast Start »


CFTC’s Gensler’s Final Goodwill Gesture to Futures Industry Blows Cold
John Lothian
Last year the Futures Industry Association’s EXPO was impacted by Hurricane Sandy, which kept multiples of dozens of people from attending the conference. This year, it is a cold wind from Washington, DC that is blowing on the event as the CFTC has scheduled an important open meeting the day before EXPO officially kicks off, which will impact some of the pre-EXPO activities and events.

The CFTC announced yesterday afternoon it will hold perhaps one of its most important open meetings on November 5, the day before the start of the Futures Industry Association EXPO in Chicago.

On November 5, the CFTC will hold an open meeting to discuss ”Position Limits and Other Business.”

They also announced an October 30 meeting to discuss customer protections.

On October 30, they will hold an open meeting to discuss CFTC Will Hold an Open Meeting to Consider “Enhancing Protections for Futures Customers and Other Business.”

I will not be able to attend either of the open meetings on 10/30 or 11/5 as I am in Mexico City at the WFE on 10/30 and am committed to an event for Phillip Futures USA on 11/5, as well as a board meeting for The IFM. I would expect several of the board members of the IFM will now be absent as they will need to be present for this important open meeting.


CFTC Will Hold an Open Meeting to Consider Proposals on Position Limits and Other Business
The U.S. Commodity Futures Trading Commission will hold a public meeting on Tuesday, November 5, 2013 at 9:30 a.m. to consider:*

WHAT: Position Limits for Derivatives; Aggregation of Accounts Under Part 150, Position Limits
WHERE: CFTC Headquarters Conference Center, Three Lafayette Centre, 1155 21st Street, NW, Washington, DC 20581
WHEN: Tuesday, November 5, 2013 at 9:30 a.m.
*Note: Other items may be added to the agenda


CFTC Will Hold an Open Meeting to Consider Enhancing Protections for Futures Customers and Other Business
The U.S. Commodity Futures Trading Commission will hold a public meeting on Wednesday, October 30, 2013, at 9:30 a.m. to consider:

WHAT: Enhancing Protections Afforded Customers and Customer Funds Held by Futures Commission Merchants and Derivatives Clearing Organizations, Protection of Collateral of Counterparties to Uncleared Swaps; Treatment of Securities in a Portfolio Margining Account in a Commodity Broker Bankruptcy, Ownership and Control (“OCR”) Reports, Forms 102/102S, 40/40S, and 71
WHERE: CFTC Headquarters Conference Center, Three Lafayette Centre, 1155 21st Street, NW, Washington, DC 20581
WHEN: Wednesday, October 30, 2013 at 9:30 a.m.

***** Is Hurricane Gary a name in use this year? If not, it ought to be.


ISE Gemini Surpasses 500,000 Contracts in a Trading Day
The International Securities Exchange today announced that ISE Gemini surpassed two milestones for the first time by trading over 500,000 contracts (actual: 601,901 contracts) in a single day, and also accounting for over 3 percent (actual: 3.3%) of equity and ETF options market share. ISE Gemini has a total of 500 listings and plans to rollout an additional 200 names by the end of October.

***** Thank you to the ISE and its customers for making our video interview with Gary Katz so timely.


ICAP Names Laurent Paulhac CEO of ICAP SEF
Ian Walker –
Interdealer brokerage firm ICAP PLC said Thursday it has appointed Laurent Paulhac as managing director and chief executive of ICAP SEF (US) LLC, reporting to Michael Spencer, ICAP’s group CEO. Mr. Paulhac joins from the CME Group where he was senior managing director for interest rate and over-the-counter products and services, and responsible for CME Group’s global interest rate and OTC business strategies.

***** The CME has not had such a high level defection to such a marquee job since Satish Nandapukar left to become CEO of Eurex US. The SEF world just got more cut-throat.


NYSE Euronext’s U.S. Liquidity Center Wins ‘Gold Award’ from the Uptime Institute
NYSE Euronext today announced that its U.S. Liquidity Center was presented with the Uptime Institute’s ‘Gold Award’ for data centers with three consecutive years of uninterrupted availability.

***** The Uptime Institute is not to be confused with the Uptempo Institute that monitors Broadway shows.


It’s not about the regs, It’s about your business
Steve Woodyatt – FOW
Regulations driven by the G20, both finalised and yet-to-be, are putting pressure on all market participants in the trading lifecycle to improve their approaches to real-time risk management and pre-trade risk constraints.

***DA: Woodyatt, chief executive and chairman of Object Trading, looks at new rules and the challenges they face in meeting upcoming regulatory reforms.


Back in the Ring: Jones takes charge at the LME
William Mitting – FOW
Garry Jones has not changed one bit. Following a 16 month hiatus from management, he returned last month to run the London Metal Exchange at a pivotal time for the metals market and the exchange itself. He is his usual bullish-self, bristling with ideas, self confidence and ambition.

***** Those new heavy metal-laced vitamins Garry Jones is taking seem to be working.


I See Your Footnote 88, and Raise You Footnote 513, Or, Kafka Squared
Streetwise Professor
In September, the CFTC’s new SEF rule threw swap market participants into a panic when they realized that footnote 88 buried within the rule would require instruments that were thought to have been outside the scope of the rule to be traded on the new SEFs. But two can play the footnote game. Today Bloomberg reports that the banks have found a footnote in the rule that allows them to shelter some trades from the SEF execution mandate. Footnote 513.

***** I for one have never been able to write with my feet.

***DA: By the way, the SEF Core Principles rule has 1148 footnotes. How many more potential loopholes are in there? They found 2 so far. See the MarketsReformWiki summary for this rule at


WMBAA announces Congressman Jim Himes will speak at SEFCON IV
The Wholesale Markets Brokers’ Association, Americas announced today that Connecticut Congressman Jim Himes will speak at SEFCON IV, the Association’s fourth annual conference.

***** Is Congressman speaking news? If a dog barks, is it news?


G.H. Financials/Trading Technologies Pre-Halloween Event October 29
G.H. Financials and TT will host a get-together at South Branch Tavern & Grill, 100 S. Wacker in Chicago, from 4-7pm next Tuesday, October 29. Join them to celebrate Halloween and find out that global clearing through G. H. Financials and market access using TTNET isn’t scary at all. To attend, please contact
(via email)

***** Not quite Beggars Night, but close. No tricks; just treats.



MarketsWiki Page of the Day

MarketsWiki Recent Updates


Chitra Ramakrishna; Tim Wilcox; Josh Tolman; Josh Nardo; James J. Johanik; Ravi Narain; John Gage III; Justin Bouchard

Companies, Organizations and Groups

National Stock Exchange of India; CameronTec; Greenline Financial Technologies, Inc.; AlgoFast


AlgoFast Gradient Scale Order System


Crowdfunding; Green-e


44,571,355 pages viewed, 7,688 articles, 166,676 edits
MarketsWiki Statistics

Lead Stories

U.S. SEC releases ‘crowdfunding’ rule
Sarah N. Lynch | Reuters
Entrepreneurs and start-up companies looking for investors will be able to solicit over the Internet from the general public under a new proposal issued by U.S. regulators on Wednesday.

Nasdaq CEO Says Nasdaq Is a ‘Credible Buyer’ for Euronext
Jacob Bunge –
The chief executive of Nasdaq OMX Group Inc. said his company is a credible buyer for NYSE Euronext and possesses the expertise and capacity to take on big European exchange deals.

BATS-Direct Edge Merger Receives Anti-Trust Clearance
Ivy Schmerken – Wall Street & Technology
The proposed merger between securities exchange operator BATS Global Markets and rival Direct Edge Holdings LLC passed an anti-trust review by the U.S. Justice Department.

DOJ probes nine banks on mortage-backed securities: FT
At least nine banks face probes by the U.S. Department of Justice into their sales of mortgage-backed securities as part of an effort by the task force that reached the $13 billion agreement with JPMorgan Chase & Co, the Financial Times reported.

Singapore ready to assist in global FX manipulation probe
The Economic Times
The Monetary Authority of Singapore ( MAS) said on Thursday it has been in touch with foreign regulators looking into the alleged manipulation of foreign exchange rates, and was ready to assist in investigations.

U.S. Congress to consider law against ‘patent trolls’
A U.S. congressman, who has led the charge against frivolous patent infringement lawsuits, introduced a bill on Wednesday to curb the behavior of so-called “patent trolls” but faced criticism that some of the proposals go too far.

VXST Short-term Volatility Index Fell 47% Since Oct 15
Matt Moran – VIX Views
Earlier this month there was quite a bit of worldwide apprehension over the wrangling in Washington D.C. regarding the partial government shutdown and possible U.S. debt default. Contentious governmental negotiations could resume in January 2014.

Arrest chills Swiss bankers’ travel plans
Seeing one of their select number hauled in handcuffs before a foreign court may prompt Swiss bankers to call their lawyers before they ring travel agents to book a winter break.

8 Questions for 3 Buffetts
Warren E. Buffett’s son Howard Graham Buffett and his grandson Howard Warren Buffett have written a new book, “Forty Chances: Finding Hope in a Hungry World,” which chronicles their philanthropic work on hunger, farming and poverty around the world. This is an edited transcript of a discussion with Warren Buffett, his son and grandson.


Financial Regulators Propose Joint Standards for Assessing Diversity Policies and Practices of Regulated Entities
Six federal financial regulatory agencies are proposing joint standards for assessing the diversity policies and practices of the institutions they regulate. The proposed standards are intended to promote transparency and awareness of diversity policies and practices within the institutions.

CFTC Will Hold an Open Meeting to Consider Proposals on Position Limits and Other Business
The U.S. Commodity Futures Trading Commission will hold a public meeting on Tuesday, November 5, 2013 at 9:30 a.m.

CFTC Will Hold an Open Meeting to Consider Enhancing Protections for Futures Customers and Other Business
The U.S. Commodity Futures Trading Commission will hold a public meeting on Wednesday, October 30, 2013; at 9:30 a.m.

Risk USA: Footnote 88 prompts BlackRock to abandon NDF platforms
Peter Madigan –
BlackRock stopped using electronic platforms to trade non-deliverable forwards (NDFs) – going back to the phone instead – after a controversial footnote in Commodity Futures Trading Commission (CFTC) rules required NDFs and many other products to be traded on swap execution facilities (Sefs).

CFTC Announces Schedule for Publication of Reports Delayed by the Government Shutdown
The U.S. Commodity Futures Trading Commission (CFTC) announced an anticipated publication schedule today for reports delayed by the recent U.S. Government shutdown.

NFA Notice to Members I-13-32
Effective Date of Amendments to NFA Financial Requirements Sections 10 and 13 and NFA Compliance Rule 2-48: Increase in Fees for Late Financial and Regulatory Filings

SEC Issues Proposal on Crowdfunding
Press Release

Statement Regarding The Proposing Release On Crowdfunding, SEC Commissioner Kara M. Stein, Washington, D.C., Oct. 23, 2013

Remarks At Open Meeting, SEC Chair Mary Jo White – Government In The Sunshine Act, Crowdfunding Chair Mary Jo White

Statement At Open Meeting Regarding Crowdfunding, SEC Commissioner Michael S. Piwowar, Washington, D.C., Oct. 23, 2013

Preview: Financial Conduct Authority’s Chief Executive Martin Wheatley’s Manion House Speech

National Crowdfunding Association Welcomes SEC’s Proposed Investment Crowdfunding Rules – abc27 WHTM

FNEX Comments on U.S. Securities and Exchange Commission Rules on Crowdfunding

Exchanges & Trading Facilities

Nasdaq profits boosted by acquisitions
Arash Massoudi in New York –
Nasdaq said net sales and profits were stronger than expected in its third-quarter, as the exchange operator’s results were lifted by the integration of the corporate services unit from Thomson Reuters and a bond-trading platform from BGC Partners.

Japan Exchange Full-Year Profit Forecast Misses Estimates
Anna Kitanaka & Toshiro Hasegawa – Bloomberg
Japan Exchange Group Inc. (8697), the main bourse operator in the world’s second-largest equity market, didn’t boost its full-year profit forecast as analysts had expected. The shares fell.

China’s new free trade zone will not allow LME warehouses
China will retain a ban on overseas commodity exchanges setting up warehouses there, a government source said, dashing expectations for London Metal Exchange warehouses in the newly launched Shanghai free trade zone.

[SIX] Investigation against UBS AG [pdf]
SIX Exchange Regulation is opening an investigation against UBS AG on the grounds of possible breaches of the rules governing ad hoc publicity.

NASDAQ OMX Commodities Welcomes RWE As New Market Maker

Hedge Funds & Managed Futures

Brevan Howard moves bulk of operations out of UK
Sam Jones, Hedge Fund Correspondent –
Brevan Howard, the world’s third-largest hedge fund, has moved most of its operations out of the UK, shifting dozens of jobs to the Channel Islands, Switzerland, Asia and the US to escape EU regulation and grow internationally.

Neuberger Berman Favors Private Equity in Latin America
Gillian Tan – MoneyBeat – WSJ
Neuberger Berman, the former asset-management firm of Lehman Brothers Holdings that is now majority-owned by its employees, is hoping to seize private equity opportunities in Latin America.

Italy’s Government Looks to Tap Pensions Funds
Giovanni Legorano – MoneyBeat – WSJ
In a world of hefty debt piles, it makes sense for governments to make sure demand for their paper remains strong. The Italian government is doing just this, looking at how local money coming from retirement savings could be used to buy larger piles of government bonds.

Deal proposed for Argentine debt stalemate
Benedict Mander in Buenos Aires –
The acrimonious legal battle between a group of hedge funds and Argentina that could tip the country into default, and make future sovereign debt restructurings harder, may yet enjoy a happy ending if a nifty plan floated by a rival group of hedge funds succeeds.

Risk USA: Buy-side prepares for fixed-income storm
Joe Rennison –
Mutual funds and other retail investment vehicles are trying to insulate themselves against fixed-income market volatility that could be unleashed as the US Federal Reserve winds down its bond-buying programme – or tapers, in the language of Fed chairman, Ben Bernanke.

ETRE Launches New Analytics Platform for REITs
Timothy Bourgaize Murray – WatersTechnology
The specialist technology provider says its new platform will allow investors in exchange-traded, commercial real estate to access capital advisory, asset management, trading and credit analysis information.

Hedge funds prepare to mop up bad Spanish company loans
Hedge funds are circling Spanish banks, hoping to mop up bad corporate debt cheaply when the lenders finally face up to billions of euros in losses on loans to firms in trouble.

Banks & Brokers

US Gov’t Takes Bank Of America To Court And Wins, Jury Finds Countrywide Liable For Fraud
Halah Touryalai – Forbes
Thought those mortgage lawsuits against banks were winding down? Think again. Today a jury found Bank of America liable for defrauding Fannie Mae and Freddie Mac when its Countrywide unit sold it bad mortgages. The jury also found former Countrywide executive, Rebecca Mairone, liable on the one fraud charge facing her, Reuters reports.

JPMorgan’s Eminence Seen Fading in Default Swaps: Credit Markets
Callie Bost & Charles Mead – Bloomberg
JPMorgan Chase & Co.’s advantage over its Wall Street peers is fading in the eyes of credit-derivatives traders as fines and regulator probes hobble profits while firms from Citigroup Inc. to Morgan Stanley rebound.

Jamie Dimon Keeps Caving And Paying Up To Resolve Mortgage-Related Problems
Nathan Vardi – Forbes
Last year, Jamie Dimon, chief executive of JPMorgan Chase & Co., was adamant that he would fight mortgage put-back claims being pursued by big investors like BlackRock. On the surface, Dimon appeared to be indicating that he was no Brian Moynihan, the chief executive of Bank of America who cut the biggest private legal settlement in the history of Wall Street, an $8.5 billion mortgage put-back settlement with a similar BlackRock-led group.

JPMorgan Faces Possible Penalty in Madoff Case
Federal authorities are preparing to take action in a criminal investigation of JPMorgan Chase, suspecting that the bank turned a blind eye to Bernard L. Madoff’s Ponzi scheme.

A Moot Effort to Burnish the Reputation of Goldman Sachs
I hate to be the bearer of good news for Jamie Dimon, but everything is going to work out O.K. How do I know? Two words: Lloyd Blankfein.

Nervous brokers reach out before bonus-disclosure rule
With the clock ticking on an impending rule that would require stockbrokers to disclose their signing bonuses to clients, some are weighing a move before the potentially embarrassing regulation takes effect.

Santander Brasil beats third-quarter profit estimates

Schwab Glitch Showed Customers Incorrect Prices
Saabira Chaudhuri –
Online brokerage firm Charles Schwab Corp. showed customers on its trading platform incorrect prices on certain fixed-income securities for about a week, the latest financial firm to suffer from technology glitches.

Clearing & Settlement

Omgeo Pairs with TriOptima, AcadiaSoft for Collateral Management
Anthony Malakian – WatersTechnology
Industry utility Omgeo announced that it is teaming with TriOptima to beef up its derivative reconciliations capabilities, and with AcadiaSoft for its margin affirmation communication solution.

Risk USA: Few options to manage CCP exposure, says RBS chief credit officer
Joe Rennison –
Banks need to think about their growing exposure to central counterparties (CCPs) and consider what will happen in the event of a clearing house default, but there are no obvious options available to dealers to manage this risk, according to Lesley Jones, group chief credit officer at Royal Bank of Scotland (RBS).

Thomson Reuters Launches FX Post-Trade System in Vietnam
Marina Daras – WatersTechnology
Thomson Reuters and the State Bank of Vietnam have launched a real-time trade monitoring and post-trade system to enhance transparency and automation in the foreign-exchange (FX) market across the country.

CFTC Announces that the Third Phase of Mandatory Clearing of iTraxx CDS Indices Begins Today and Reminds Market Participants that Cross-Border Exemptive Relief Expired on October 9, 2013

Moscow Exchange: National Clearing Centre Becomes Russia’s First Qualified Central Counterparty
The National Clearing Centre (NCC) was assigned the Russia”s first qualified central counterparty (CCP).

NZX Congratulates Therese Walsh
NZX congratulates Therese Walsh, one of NZX’s Directors, who was last night named the Supreme Award winner at the inaugural Women of Influence Awards.

Indexes & Products

KCG Holdings Hires Chris Hempstead to Head ETF Sales
Chris Dieterich and Jacob Bunge – MoneyBeat – WSJ
KCG Holdings Inc. (KCG) hired former WallachBeth LLC exchange-traded-fund specialist Chris Hempstead to head its ETF sales team, the latest in a string of moves by some of Wall Street’s highest-profile ETF traders in the wake of Getco LLC’s acquisition of Knight Capital Group Inc.


NYSE Technologies’ XDP powers the HKEx OMD Platform
NYSE Technologies, the commercial technology division of NYSE Euronext, today announced that its Exchange Data Publisher is the market data engine powering the new Hong Kong Exchanges and Clearing Orion Market Data Platform.

Time Synchronization Critical For High-Speed Trading Firms To Stay Compliant And Profitable In 2014 – Human Error, Technology Limitations And GPS Spoofing Among Major Threats
To successfully execute on complex trading strategies and to stay in compliance, a firm must know the exact time that events happen, such as ticks, trades, and computed correlations. If a time stamp is off, it could be the difference between a successful trade and a debilitating business challenge.

FCM360 introduces CLOUD TRADER – the World’s Fastest Low-Latency Virtual Trading Servers
FCM360 has just introduced the new CLOUD TRADER product group, giving retail and small institutional investors superior access to Foreign Exchange trading formerly available only to big banks and financial institutions at a far greater cost.


U.S. SEC cracks down on advisers over repeated compliance failures
Three investment advisers and their owners agreed on Wednesday to settle civil charges that they had repeatedly failed to address compliance problems, in a case that stems from a broad crackdown by U.S. regulators into compliance failures by asset managers.

U.S. court upholds ex-consultant Jiau’s insider trading conviction
A federal appeals court has upheld the conviction of Winifred Jiau, a California technology consultant who prosecutors said used code language to disguise an insider trading scheme in which she gave live lobsters and other gifts in exchange for nonpublic information.

Beverly Hills securities broker target of Wall Street complaint
A Beverly Hills securities broker, whose clients included Hollywood stars, is being accused by Wall Street’s industry-funded watchdog of lying to regulators and selling worthless securities to unsuspecting customers, including a divorced mother of three.

Environmental & Energy

Mystery of the ‘Missing’ Global Warming
Have you heard the one about how global warming stopped in 1998? It’s been called a “pause,” a “hiatus,” a “slowdown” and a “siesta.” Above all, it’s a red herring, and it isn’t difficult to find where some of the ‘missing’ heat has gone.

US power plant pollution declines 10 percent from 2010
The amount of harmful greenhouse gas pollution spewed into the atmosphere by large US power plants has declined 10 percent since 2010, the US government said Wednesday.

Australia, U.N. spar over wildfires and climate change
Australia’s prime minister accused the U.N.’s climate change chief on Wednesday of “talking through her hat” when she drew a link between wildfires raging in his country and global warming.


Is Asian Private Equity a Black Hole?
Sonja Cheung – MoneyBeat – WSJ
A distribution shortfall is taking hold of Asian private equity, where the rate at which investors are putting cash into Asia-focused funds is far outpacing firms’ ability to pay them back.

China conjures up new ‘bad bank’ magic trick
Henny Sender –
Beijing is authorising the establishment of a second batch of so-called bad banks, this time at the provincial level, as it continues its slow move towards more financial deregulation.

China to launch simulated trading in stock index options in Nov – report
China will launch simulated trading in stock index options on November 8, official media reported on Wednesday, as regulators move to enhance risk hedging options to support further financial reforms.

[OSE] Designation of Market Maker for OSE DJIA Futures: Merrill Lynch Japan Securities Co., Ltd.

Taiwan Futures Exchange (TAIFEX) Monthly Newsletter- October 2013

Shanghai Stock Exchange’s New Trading Rules To Be Implemented In December: Thresholds For Block Trading Lowered

Frontier Markets

DME record volume
DME had a record volume yesterday of 13,715 lots. Their previous daily record was 13,007 in July 2012.

So It’s OK To Like Emerging Markets Again?
David Cottle – MoneyBeat – WSJ
Have emerging market assets finally embarked on a rally which can stick? Quite a few analysts seem to think so, including those who have been cautious or outright bearish in the past.

Arrested NSEL officials forged documents: EOW
Indian Express
Investigations into the Rs 5,600 crore payment crisis at the National Spot Exchange Limited (NSEL) have revealed that the fraudulent entries found to be made in NSEL’s balance sheets were done so at the behest of arrested accused Amit Mukherjee, Jai Bahukhandi and Anjani Sinha, sources in the Economic Offences Wing (EOW) of the Mumbai Police said on Wednesday.

Tehran Stock Exchange’s CEO Remarks On The Exchange’s Recent Performance

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