John Lothian Newsletter: Vermaas set for CME Europe chief exec role; Goldman group set to buy message system as alternative to Bloomberg; Bafin Extends Deutsche Bank Libor Investigation

Aug 4, 2014

First Read

Saving the Planet, One Bike Ride At A Time
Jim Kharouf
As many of you know, I enjoy biking to work each day. It’s partly for the exercise and partly for the planet we all live in. So it was great to hear that Diane Saucier, of Celoxica and WILD has taken on the challenge as well, but in a big way.

In early September she will be riding in Climate Ride Midwest, a 4-day, 300 mile bike ride from Grand Rapids, Michigan to Grant Park in Chicago. This is a great event, helping to raise awareness about climate issues and sustainability. She’ll be riding in support of the Alliance for the Great Lakes, the oldest Great Lakes organization devoted 100 percent to protecting and restoring the world’s largest surface freshwater resource.

She’s raised about $3,700 of her $5,000 goal to date. Please consider supporting this effort with a tax-deductible donation. Just follow the link below.
bike.climateride.org/participant/DianeSaucier

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ICE pledges to implement market-based swaps benchmark
John Bakie – The Trade
Intercontinental Exchange (ICE) has taken over the administration of the ISDAFIX benchmark, a key rate for the pricing and settlement of swaps. The new administrator hopes to eventually use a more reliable market-based calculation for the rate to increase confidence in the benchmark.
jlne.ws/1qU7d53

***** I have great trust that ICE will find the right market-based benchmark. You could call this my ICE trust.

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CME Clearing Europe Receives EMIR authorisation
CME Group, the world’s leading and most diverse derivatives marketplace, today announced CME Group’s European clearing house, CME Clearing Europe, has today received authorisation as a Central Counterparty Clearing House (CCP) under the European Market Infrastructure Regulation (EMIR). The authorisation covers all OTC derivatives and futures products currently cleared by CME Clearing Europe.
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***** I love the smell of European CCP competition on a Monday morning in August, it smells like vacation.

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Almost 90% of active UK equity funds beat benchmark
Laura Dew – Investment Week
Almost 90% of active UK equity fund managers beat the benchmark index last year, far outstripping the performance of other active managers, an S&P Indices report has found.
jlne.ws/1kh6sA0

***** The UK, where nearly all the equity fund managers are above average.

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MGEX Reports Best July Volume Since 2010
MGEX, a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), announces a total volume of 141,562 from July, the highest finish for the month since 2010 and a 42 percent increase over the total volume from July 2013.
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***** It was the best of times.

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CBOE Futures Exchange Sets An All Time Record
Over 500,000 contracts were traded today at CBOE Futures Exchange setting an all time record.
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***** It was the best of times amid the worst of times, which is why the VIX can be such a great hedge.

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German algo-flags do little to hit HFT
Joe Parsons – Futures & Options World
Since April 1, derivatives traders in Germany have been required to identify each individual algorithmic order with a key/flag, detailing in real time the entire decision process behind that order.
jlne.ws/1qU7Prc

***** Is there a rainbow flag? I want to know that that algo does?

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Scottish fund managers fear ‘traitor’ label
Madison Marriage – Financial Times
Scotland’s fund houses have appeared calm as the referendum approaches, but privately emotions are running high for many Edinburgh-based fund executives. There is a significant divergence in views on what independence could mean for Scotland’s historic fund industry.
jlne.ws/1xU85V5

***** Scottish independence could be the most interesting economic experiment since the Big Bang.

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Bridging the Week: CFTC Carrot and Stick; Proposed New AML Obligations; MFA Wish List; ICE Hedges
Gary DeWaal – Katten Muchin Rosenman
A carrot and a stick. Two weeks ago the US Commodity Futures Trading Commission granted relief from certain obligations under its large trader reporting regime by extending the deadline for the filing of certain reports to various dates in 2015 and 2016. Last week the CFTC filed an enforcement action against a futures commission merchant for not complying with other large trader reporting obligations, although the fault seemed to originate with defective third-party vendor software. Also last week, the Financial Crimes Enforcement Network of the US Department of the Treasury proposed new anti-money laundering know-your-customer obligations on certain financial institutions.
jlne.ws/1qU6wbN

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MarketsWiki

MarketsWiki Page of the Day
Robert Pickel
jlne.ws/1eDINXG

MarketsWiki Recent Updates

People

Ray Cahnman; Mark Yallop; Larry Arnowitz; Mary L. Brienza; Stephen A. Brodsky; Robert G. Pickel; Cetip; Gilson Finkelsztain

Companies, Organizations and Groups

ICE Futures U.S.; IntercontinentalExchange Group Inc.; GFI Group Inc

Statistics

51,626,923 pages viewed, 8,007 articles, 184,947 edits
MarketsWiki Statistics

Lead Stories

Vermaas set for CME Europe chief exec role
Luke Jeffs – Futures & Options World
CME Group is expected to unveil Cees Vermaas as the next chief of CME Europe after the chief executive of Euronext Amsterdam quit on Friday following weeks of speculation he was being lined up for the job.
jlne.ws/1zNflor

***** If he is just half as good as the late Bob Ray, the CME will have made a great choice.

Exclusive: Goldman group set to buy message system as alternative to Bloomberg – sources
Lauren Tara LaCapra and Jennifer Saba – Reuters
Wall Street firms led by Goldman Sachs Group Inc are close to buying a stake in chat and instant messaging startup Perzo Inc in pursuit of an alternative to a similar application from Bloomberg LP, sources familiar with Goldman’s plans said.
jlne.ws/1xU6bnj

***** Open source is the future and Goldman and friends are making a smart bet on supporting open source with this investment.

Bafin Extends Deutsche Bank Libor Investigation, Spiegel Says
Julia Mengewein – Bloomberg
Germany’s financial regulator, BaFin, is extending investigations into alleged interest-rate manipulation at Deutsche Bank AG, Europe’s largest investment bank, German magazine Der Spiegel reported.
jlne.ws/1xU6u1q

Lords pushes FCA to tackle HFT
Tim Cave – Financial News
An influential House of Lords committee has pushed the UK’s Financial Conduct Authority to tackle high-frequency trading after hearing evidence on the subject from the chief executive of IEX Group.
jlne.ws/1zNejsH

Dog Days of Summer for Stock Trading
Dan Strumpf – MoneyBeat – WSJ
Will the last person to leave the trading floor please turn out the lights? The downturn in stock trading volumes showed no sign of slowing in July. An average of 5.7 billion shares a day have traded hands in July, the lowest figure for July since 2006, according to data from Credit Suisse.
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Britain Fails to Find Riches It Expected in Swiss Accounts
STEPHEN CASTLE and DOREEN CARVAJAL – NY Times
When the British tax authorities struck a landmark deal with the Swiss to crack down on tax evasion, they sat back and waited for the cash to flow in. Almost three years later, they are still waiting.
jlne.ws/1AO2SST

‘Too-Big-To-Fail’ Becomes Too-Hard-To-Solve in GAO Study
Cheyenne Hopkins – Bloomberg
A long-awaited government report on advantages for U.S. banks considered “too big to fail” won’t settle the debate. A study by the Government Accountability Office released yesterday was effectively a split decision, giving both sides fodder for their views: The watchdog found that the largest banks enjoyed a market subsidy during the 2008 financial crisis, borrowing at a lower cost because of the perception that they were too large for the government to let them fail. That result pleases smaller banks. The GAO also said that the funding advantage has since decreased. That conclusion pleases mega-banks.
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Argentina Default Is Ruled a Credit Event for Swaps
PETER EAVIS – Dealbook – NY Times
The repercussions of Argentina’s sovereign debt default continued to spread through global markets on Friday, as an industry body decided that financial instruments used to insure against the default must pay out.
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Market Manipulation and Why Some Strings are More Powerful than Others: The Honest Truth About Dishonesty
Edward Talisse – TABB Forum
Market manipulation may be so prevalent simply because the consequences of being caught are not too painful. The reality is that many individual cases of market manipulation simply do not have any systemic significance. It is time that regulators focus on sources of systemic market manipulation rather than on individual bad actors.
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Obama says CEOs should quit complaining: Economist
Roberta Rampton – Reuters
President Barack Obama said corporate America has done well under his economic policies, telling the Economist magazine that chief executive officers should stop complaining about regulations and show greater social responsibility.
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Regulatory

No S’more Crises: Global Financial Regulators Gather for Summer Camp
Ryan Tracy – WSJ
To prepare for the next global financial crisis, nearly a dozen financial-sector overseers from across the world decamped to Yale University for the first-ever regulatory summer camp.
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Rising compliance costs rupturing banks’ trade finance relationships
Euromoney Magazine
Collaboration between transaction banks and Swift is helping to spread the burden and rocketing cost of compliance, but for some banks’ trade finance businesses, client relationships have already been hit hard by the expense.
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Asic reporting definition ‘unworkable’ say foreign banks
Viren Vaghela – Risk.net
A clarification of the Australian financial regulator’s reporting remit concerning cross-border trades has caused widespread confusion among international banks which claim it is almost impossible to implement and poses significant systems and compliance challenges.
jlne.ws/1AO1OOV

Senator Grassley probes U.S. CFTC’s spending on office leases
Sarah N. Lynch – Reuters
A U.S. lawmaker has launched an inquiry into the amount of money the Commodity Futures Trading Commission spends on office leases, expressing concern that the derivatives regulator is wasting taxpayer money on underutilized space.
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ESMA Publishes An Update Of Its Guidelines On ETFs And Other UCITS Issues
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Exchanges & Trading Facilities

CBOE to cut expenses as earnings drop on weak volumes
Tom Polansek – Reuters
CBOE Holdings Inc on Friday became the second exchange operator this week to say it will cut expenses in the face of declining trading volumes that are eating into profits. A day earlier, CME Group Inc, the world’s largest futures market operator, said it would reduce hiring and travel expenses to compensate for weak trading volumes.
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The Options Industry Council Announces July Options Volume Increased 9 Percent
The Options Industry Council (OIC) announced today that 355,432,350 total options contracts traded in July, up 9.48 percent compared to last July when 324,651,203 contracts exchanged hands. This marks the second busiest July on record behind July 2008.
jlne.ws/1kh6YOf

CME Group Volume Averaged 12.2 Million Contracts per Day in July 2014, Up 13 Percent from July 2013
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that July 2014 volume averaged 12.2 million contracts per day, up 13 percent from July 2013. Total volume for July 2014 was more than 269 million contracts, of which 86 percent was traded electronically. CME Group open interest stands at 101 million contracts at the end of July, up 10 percent from the end of June 2014 and 20 percent year-to-date.
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CBOE Holdings Reports July 2014 Trading Volume
CBOE Holdings, Inc. reported today that July 2014 trading volume for options contracts on Chicago Board Options Exchange and C2 Options Exchange and futures contracts on CBOE Futures Exchange totaled 108.89 million contracts. Average daily volume was 4.95 million contracts, an 11-percent increase from July 2013 and a four-percent increase from June 2014.
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CBOE Futures Exchange Reports July 2014 Trading Volume
The CBOE Futures Exchange, LLC today reported that July 2014 was the second-busiest month all-time for total trading volume exchange-wide at CFE and for futures on the CBOE Volatility Index.
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OneChicago Announces July 2014 Trading Volume Increase Of 39% Year-Over-Year
OneChicago, LLC (OCX), an equity finance exchange, today announced its July 2014 volume of 811,260 a 39% increase year-over-year.
jlne.ws/1kh6PKG

Average Daily Volume Of 6.3 Million Contracts At Eurex Group In July
In July 2014, the international derivatives markets of Eurex Group recorded an average daily volume of 6.3 million contracts (July 2013: 6.8 million). Of those, 4.2 million were Eurex Exchange contracts (July 2013: 4.6 million), and 2.1 million contracts (July 2013: 2.2 million) were traded at the U.S.-based International Securities Exchange (ISE). In total, 97.0 million contracts were traded at Eurex Exchange and 47.1 million at ISE.
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Turnover At Deutsche Börse’s Cash Markets At 99.1 Billion Euros In July
Order book turnover on Xetra, the Frankfurt Stock Exchange and Tradegate stood at EUR99.1 billion in July (July 2013: EUR98.5 billion). Of the EUR99.1 billion, EUR91.3 billion were attributable to Xetra (July 2013: EUR90.9 billion). EUR4.1 billion were attributable to the Frankfurt Stock Exchange (July 2013: EUR4.1 billion). Order book turnover on Tradegate Exchange* totalled approximately EUR3.7 billion in July (July 2013: EUR3.5 billion).
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ISE Reports Business Acitvity for July 2014
ISE and ISE Gemini combined represent 14.8% of equity options market share, excluding dividend trades. ISE and ISE Gemini reported a combined ADV of 2.1 million contracts. Dividend trades made up 1.4% of industry volume in July 2014.
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BOX Options Exchange Price Improvement For July
In the month of July, price improved contracts on BOX Options Exchange averaged 329,089 per day.
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CBOE Holdings Reports Second Quarter Results
CBOE Holdings, Inc. today reported net income allocated to common stockholders of $42.6 million, or $0.50 per diluted share, for the second quarter of 2014, compared with $45.5 million, or $0.52 per diluted share, in the second quarter of 2013. On an adjusted basis, net income allocated to common stockholders was $42.6 million, or $0.50 per diluted share, compared with $47.0 million, or $0.54 per diluted share, in the same period last year. Operating revenue for the quarter was $143.9 million, down 5 percent compared with $150.8 million in the second quarter of 2013.
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EEX Trading Results In July
Highest Monthly Volume In Power Derivatives In 2014 – Strong Increases In German, French And Italian Power Futures
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The Trading Volume On The Spanish Stock Exchange In July Reached EUR90 Billion, Up 23% Yoy
The equity trading volume to the end of July was up 27% on the year. The number of trades in July was up 47%, at 6.3 million. ETF trading volume in July is more than 3 times as high as last year. The number of Derivatives contracts in July grew 13.4% to 4.2 million contracts, featuring strong volumes in Index Options and Index Futures
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NASDAQ OMX Nordic: Trading Statistics July 2014
The share trading increased by 8.0% to a daily average of 1.873bn EUR, compared to 1.735bn EUR in July 2013. Compared to the previous month, June 2014, the daily average decreased by 16.8 %. Derivatives trading increased by 2,8 % to a daily average of 345,437 contracts, compared with 336,155 contracts in July 2013.
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July Statistics Report From The NASDAQ OMX Nordic Exchanges
The value of average daily share trading amounted to EUR 1.9 billion, compared to EUR 2.5 billion during the past 12-month period. The average number of trades per trading day was 285,369 compared to 328,879 during the past 12-month period. The total market cap of listed companies at NASDAQ OMX Nordic Exchange amounted to EUR 975 billion, compared to EUR 845 billion in July 2013.
jlne.ws/1kh6BU4

Nordic Growth Market Reports A Turnover Of 4.3 Billion SEK (471 Million Euro) For July 2014
Nordic Growth Market NGM generated a total turnover of 4.3 billion SEK (471 million Euro) for July 2014, based on NGM’s three markets; Sweden, Finland and Norway.
jlne.ws/1kh6AiY

New Records Set On Moscow Exchange Repo Market
Interdealer repo trading volumes in depositary receipts and foreign stocks on Moscow Exchange (“repo with shares” trading mode) were up more than 100% month-on-moth to RUB 446.2 bln in July 2014.
jlne.ws/1kh6HLs

New Records Set For Yuan Trading On Moscow Exchange
Record volumes have been posted in trading of the Chinese Yuan/Russian Ruble (CNY/RUB) on Moscow Exchange”s FX Market.
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Vienna Exchange Debuts Intraday Corporate Actions
Giulia Lasagni – WatersTechnology
Wiener Börse’s new Corporate Action Service offers data from more than 300 firms on an intraday basis, including those in six other markets covered by its central and eastern European parent group
jlne.ws/1xUehMJ

MIAX Options Exchange: MIAX Options – Interface Specification (FOI & CTD) Updates To Support Additional Billing Parameters For The MIAX Price Improvement Mechanism (PRIME)
jlne.ws/1kh5SSM

TOM MTF Statistics Week 31, 2014
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Hedge Funds & Managed Futures

Allianz to stick with old guard as CEO contract ends
Jonathan Gould – Reuters
Allianz is poised to reappoint Michael Diekmann as chief executive in October, investors believe, possibly delaying tough choices on whether Europe’s largest insurer expands its global presence or returns more cash to shareholders.
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Ontario pension tsar’s harsh hedge fund lesson
Chris Newlands – Financial Times
When Ron Mock became president and chief executive of the Ontario Teachers’ Pension Plan in January – one of the world’s largest pension funds – his appointment raised more than a few eyebrows. Not just because Mr Mock, who is a 13-year veteran of the $140.8bn Canadian pension scheme, has a background in the somewhat controversial area of hedge funds, but because the hedge fund company he once presided over collapsed in 2000 with losses of more than $125m.
jlne.ws/1uY6S2U

Hedge funds eye a profit from European bank research retreat
Nishant Kumar and Simon Jessop – Reuters
As Europe’s big investment banks and brokerages scale back their research efforts, particularly towards small and mid-sized companies, some hedge funds and other specialist players spy an opportunity.
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Harvard hires former hedge fund manager to head public equity
Reuters
Harvard University has hired a former hedge fund manager as head of public equity to help oversee how its $32 billion endowment invests in stock markets around the world, the Ivy League school said on Friday.
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Too much risk for most institutional investors
Chris Flood – Financial Times
Just 18 per cent of 101 institutional investors said their funds had stayed within their risk-tolerance limits over the past decade. One in six reported that at least half of the funds they had invested in exceeded their risk tolerances over the same period.
jlne.ws/1xU8hUh

The multi-asset movement gathers pace
David Oakley, Investment Correspondent – Financial Times
Last week, Europe’s two biggest listed investment groups reported results. Aberdeen Asset Management suffered its fifth successive quarter of outflows, while Schroders announced record pre-tax profits on the back of solid inflows of GBP4.8bn. Their contrasting fortunes highlight the benefits of having a more diversified product range.
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Woodford shoots straight to top of Pridham Report
Alasdair Pal – Investment Week
Woodford Investment Management was the best-selling active fund group in the second quarter of this year, after raising £1.6bn for its Equity Income fund.
jlne.ws/1qU7fdb

Mid Europa raises EUR810m for fourth fund
Anne-Sylvaine Chassany, Private Equity Correspondent – Financial Times
Mid Europa Partners, the largest private equity group in central and eastern Europe, has raised EUR810m for its fourth fund – half the amount it raised before the financial crisis – as investors take a cautious view on the region amid mounting tensions between Russia and the west.
jlne.ws/1kh3fQU

Doomsayers distrust ‘sexy part of the market’
Stephen Foley – Financial Times
The lawyers and investment bankers are in clover. Corporate mergers and acquisitions are back with a vengeance, and the fees for advising on deals are rolling in. The list of companies involved gets longer almost every day and now spans almost all sectors of the market. Little wonder that Ken Jacobs, chief executive of Lazard, the M&A adviser, boasted to the Financial Times that his business was in the “sexy part of the market” right now.
jlne.ws/1xUcoQj

Return to form at hedge fund manager Man Group
Miles Johnson – Financial Times
A strong return to form for hedge fund manager Man Group’s much maligned “black box” quantitative trading strategies helped draw in $2.8bn of assets in the first half as recovery under Emmanuel “Manny” Roman, chief executive, showed signs of gathering pace.
jlne.ws/1uY77eo

Man Group shares retreat as inflows slow and margins narrow
Reuters
Hedge fund manager Man Group Plc reported a sharp fall in net inflows in the second quarter and its chief executive said on Friday he was cautious on the outlook for the rest of the year, sending its shares sharply lower.
jlne.ws/1uY6amm

Councils get aggressive over pressure to go passive
Mark Cobley – Financial News
Councils responsible for GBP180 billion of pension funds have defied UK government pressure to seek savings by switching their funds to passive management. Local authorities across England and Wales have strongly defended the City’s active fund managers, with accusations that the analysis that supported passive investment is “flawed and inaccurate”.
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Northern Ireland Outperforms Rest Of UK In Attracting Foreign Investment
A report published by UKTI – Inward Investment Report 2013/14 – has shown that Northern Ireland has outperformed the rest of the UK regions in attracting foreign investment.
jlne.ws/1kh6Ezc

Polish Pension Fund Opt-In Rush Saves Bourse From Selloff
Piotr Bujnicki and Maciej Martewicz – Bloomberg
Polish pension funds, among the biggest investors on the Warsaw Stock Exchange, retained enough clients during the industry’s overhaul to continue operations and avoid the risk of forced equity sales.
jlne.ws/1xUb2F9

Ares Management plots Hayfin Capital Management buy
Alec Macfarlane and Dan Dunkley – Financial News
Ares Management has emerged as a potential buyer of private debt specialist Hayfin Capital Management in a deal that would more than double the size of the US alternative investment giant’s direct lending business in Europe.
jlne.ws/1s3tdqa

BlackRock employee exits after GBP43k fare-dodge scheme
Investment Week
A BlackRock employee has left the group after being found to have avoided GBP43,000 in train fares over the past five years.
jlne.ws/1kh6nMK

CFTC Commitments Of Traders Reports Update
jlne.ws/1o6sKCs

Banks & Brokers

Evercore to buy Hyman’s ISI to Add Research and Trading
Zeke Faux and Matthew Monks – Bloomberg
Evercore Partners Inc. agreed to buy closely held International Strategy & Investment Group LLC in an all-stock transaction as it seeks to expand its research and trading business.
jlne.ws/1uY5AF9

Clawing back bonuses is easier said than done
Brooke Masters – Financial Times
This week, UK regulators put forward what they say are the world’s toughest rules on bankers’ pay. The plans call for big bonuses to be deferred for between five and seven years and, in cases of “misbehaviour” or a “material failure of risk management”, make it possible to “clawback” stock and cash as many as seven years after it was awarded.
jlne.ws/1uY5hdn

Trading Drops Hit KCG Holdings Profit
Michael Calia – WSJ
KCG Holdings Inc.’s second-quarter results fell below analysts’ expectations as trading revenue declined from the previous period. Like other trading firms, KCG has had to contend with recent declines in volatility and market action, including through scaling back operations.
jlne.ws/1uY5sVY

Citigroup Could Lose up to $80 Million From Argentina Default
Saabira Chaudhuri – WSJ
Citigroup Inc. said Friday it could lose up to $80 million as part of regulators’ response to Argentina’s default this week.
jlne.ws/1uY7OEl

Nomura doubles profit target, aims to grow client assets by 2020
Ritsuko Ando – Reuters
Nomura Holdings Inc doubled its profit target on Friday, saying it aims to take advantage of Japan’s emergence from years of deflation and sluggish economic growth to attract more customer funds.
jlne.ws/1uYd0bk

Former Head of Barclays’ Mergers Unit to Join Goldman
MICHAEL J. DE LA MERCED – Dealbook – NY Times
The former global head of Barclays’ mergers and acquisitions business, Paul G. Parker, is set to join one of his former rivals, Goldman Sachs.
jlne.ws/1xVRD6P

London Banker Jobs Decrease as Large Firms Slow Hiring
Ambereen Choudhury – Bloomberg
Job vacancies at London’s financial-services companies fell by 8 percent in July from the previous month as hiring by large securities firms slowed, according to a survey by a recruitment firm.
jlne.ws/1kh76gJ

Bank Of America Is The Most Complained-About Bank In The US
Libby Kane – Business Insider
If you’ve ever complained about your bank, you aren’t the only one. At least 250,000 others are griping, as well.
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Clearing & Settlement

OCC Announces Cleared Contract Volume Increased 10% In July
OCC announced today that total cleared contract volume reached 360,585,699 in July, a 10 percent increase from the July 2013 volume of 328,899,421 contracts. This represents the second highest July volume on record following the July 2008 volume of 366,783,829 contracts. OCC’s year-to-date cleared contract volume is up 0.26 percent from 2013 with2,477,587,106 contracts.
jlne.ws/1kh6WWR

Margin offset competition concerns clearing members
Jon Watkins – The Trade
Cross-margining offered by Europe’s biggest clearing houses has been called into question by clearing members, amid concerns competition in this area will increase risk in the derivatives market.
jlne.ws/1xUeiAo

ICE Benchmark Administration Completes ISDAFIX Transition
Intercontinental Exchange, the leading global network of exchanges and clearing houses, today announced that ICE Benchmark Administration (IBA) has formally taken over the role of Administrator of the ISDAFIX benchmark from the International Swaps and Derivatives Association (ISDA).
jlne.ws/1zNeRyN

Indexes & Products

Financial Advisers Weigh Impact of SEC’s New Money-Fund Rules
Daisy Maxey – WSJ
Some financial advisers are reassuring their retail clients who own money-market funds that new regulations requiring a floating share price won’t affect them. But some institutional clients in money-market funds may consider moving their money into other types of money funds or other fixed-income products.
jlne.ws/1uYaAtb

Fed Gets Hip to the VIX
Steven M. Sears – Barron’s
The Federal Reserve’s easy-money policies saved the financial system from failing under the weight of the credit crisis. But the hangover of the central bank’s quantitative-easing experiment of historically low interest rates and monthly asset purchases helped create historically high levels in the stock market. Some investors even worry of a postcrisis bubble. This is apparently not lost on the Federal Reserve.
jlne.ws/1uYbk1D

HKEx boosts promotion of China index futures
Joe Parsons – Futures & Options World
Hong Kong Exchanges and Clearing (HKEx) has furthered its promotion programme for its China CES 120 index futures as it prepares to launch its mutual market access link with Shanghai. According to a statement from the exchange group, it will launch a promotional programme between October 1 and December 15, in order to enhance the trading knowledge of HKEx staff and their clients for the contract.
jlne.ws/1zNfAjn

Can ETFs Be Derailed?
Jonathan R. Laing –
For all their popularity and éclat, exchange-traded funds are like blockbuster drugs — hugely beneficial when used correctly, but not bereft of potential adverse side effects. And, while the risks might seem small or unlikely, they could add up to an unpleasant experience. Some bankers, traders, and academics are increasingly voicing concerns that ETFs could exacerbate market downturns.
jlne.ws/1uY5kpJ

New ‘iBillionaire’ ETF looks to bring Buffett and Icahn to the masses
Ashley Lau – Reuters
Mom and pop investors hoping to emulate the investment savvy of Wall Street’s wealthiest like Warren Buffett and Carl Icahn will have a new way into markets on Friday when the latest low-cost exchange-traded fund tracking the stock picks of big name investors begins trading.
jlne.ws/1uY6zoO

Checking Up on Fidelity’s New ETFs
Lewis Braham – Barron’s
If ETFs are like the Protestant Reformation to the fund industry, Fidelity is the Catholic Church. The House that Peter Lynch built is famous for its active management. That’s why to fund insiders it was as astonishing as Vatican II when the $2 trillion money manager launched 10 sector index ETFs of its own last October. Prior to that it had opened only one other ETF, Fidelity Nasdaq Composite Index, which it let languish for more than a decade.
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Distribution And Impact Of Discovery Communications Inc. Distribution On The NASDAQ OMX Indexes
jlne.ws/1kh5Ry3

Technology

Fidessa returns to underlying growth
Futures & Options World
Fidessa has said that market conditions continue to improve as it posted a return to underlying growth in its interim results, which were hit by the strong pound. The software vendor reported revenues of £137.1m, a 2% fall on the first six months of last financial year but a 4% increase at constant currencies.
jlne.ws/1qU7On2

Wealth Managers Enlist Spy Tools to Map Portfolios
QUENTIN HARDY – NY Times
Some of the engineers who used to help the Central Intelligence Agency solve problems have moved on to another challenge: determining the value of every conceivable investment in the world.
jlne.ws/1xVRjF5

Enforcement

SEC Obtains Nearly $70 Million Judgment Against Richmond, Va.-Based Firms and CEO Found Liable for Defrauding Investors
The Securities and Exchange Commission today announced that it has obtained a final judgment in federal court in Tennessee requiring a Richmond, Va.-based financial services holding company, a subsidiary brokerage firm, and their CEO to pay nearly $70 million as the outcome of a trial that found them liable for fraud.
jlne.ws/1xVRJLG

CFTC Charges Florida-Based Southern Trust Metals, Inc. and Robert Escobio, and His BVI-Based Entity Loreley Overseas Corp., with Operating an Illegal Precious Metals Scheme, among other Violations
The U.S. Commodity Futures Trading Commission (CFTC) filed a civil enforcement Complaint in the U.S. District Court for the Southern District of Florida against Defendants Southern Trust Metals, Inc. (ST Metals) and Robert Escobio, both of Coral Gables, Florida, and Loreley Overseas Corp. (Loreley), a British Virgin Island entity that Escobio incorporated in 2004.
jlne.ws/1xVROiq

Environmental & Energy

Airbnb celebrates environmental savings
Jessica Shankleman, BusinessGreen
The growing trend for holiday makers to rely on the hospitality of strangers, rather than booking into expensive hotels, certainly has financial benefits, but a new report by Cleantech Group has highlighted how online services such as Airbnb or Couchsurfing are delivering environmental benefits as well.
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IMF urges higher energy taxes to fight climate change
Reuters
Energy taxes in much of the world are far below what they should be to reflect the harmful environmental and health impact of fossil fuels use, the International Monetary Fund said in a new book on Thursday.
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***LB: Also in this story “For the first time, the IMF laid out exactly what it views as appropriate taxes on coal, natural gas, gasoline and diesel in 156 countries to factor in the fuels overall costs, which include carbon dioxide emissions, air pollution, congestion and traffic accidents.”

Manufacturers: Ozone standard could be most costly regulation ever
Benjamin Goad, The Hill
A looming Obama administration rule aimed at updating the federal ozone standard could be the single most expensive federal regulation in U.S. history, according to a new study commissioned by the National Association of Manufacturers (NAM).
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***LB: Also in this story “The proposal, expected to be unveiled by years end, could lead to millions of lost jobs, $2.2 trillion in compliance costs and a $3.4 trillion blow to gross domestic product between 2017 and 2040, according to the 142-page study.”

Asia-Pacific

Singapore Plans Curbs to Avoid Repeat of Penny-Stock Rout
Pooja Thakur and Jonathan Burgos – Bloomberg
Singapore is bringing in tougher rules for its equity market to help restore investor confidence after a penny-stock slump erased $6.9 billion in market value from commodity companies over three days in October.
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Tokyo Bourse Moves Toward Longer Hours With Panel Report
Yuko Takeo and Toshiro Hasegawa – Bloomberg
Tokyo’s stock exchange moved a step closer to lengthening the developed world’s shortest trading day after an advisory panel said the bourse should consider a separate evening session.
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Factbox: Potential losses in suspected China port metals financing fraud near $900 million
Reuters
HSBC last week became the latest company to initiate legal action in connection with the suspected metals financing fraud at China’s Qingdao port, signaling losses could climb from the events at the world’s seventh busiest port.
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China repeats promise to increase investment, speed up reforms
Reuters
China will increase investment in areas including the property sector, while authorities will advance wide-ranging economic reforms such as changing the fiscal and pricing systems, the country’s powerful economic planning agency said on Monday.
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China Central Bank Signals No Broad Monetary Easing
Bloomberg
The People’s Bank of China warned that the country’s credit and money supply have increased rapidly and indicated that it will refrain from broader monetary easing to support growth.
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Singapore to increase investment in China
Jennifer Hughes in Hong Kong – Financial Times
Singapore’s sovereign wealth fund has signalled its confidence in China’s structural reforms by increasing its allocation to the country, as part of a push to boost its emerging markets exposure.
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New South Korea finance chief has a brand; product to follow?
Tony Munroe and Christine Kim – Reuters
Three frenetic weeks into the job, South Korea’s new finance minister Choi Kyung-hwan has made such a splash that his name already describes Seoul’s plans to rev-up faltering growth.
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MAS and SGX issue response to the consultation on the review of the securities market structure and practices
The Monetary Authority of Singapore (MAS) and Singapore Exchange (SGX) today issued their response to the joint consultation paper on the Review of the Securities Market Structure and Practices, which was published on 7 February 2014.
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TSI Coking Coal Indices Form Basis Of New Singapore Exchange Derivatives
The Singapore Exchange (SGX) is utilizing The Steel Index (TSI)’s daily coking coal price indices published by Platts, a leading global provider of energy, metals and commodities information, as the settlement basis for its metallurgical coal futures and swaps contracts launched today.
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Osaka Exchange: Partial Revisions To Reference Price Of Dynamic Circuit Breaker For Index Futures Contracts
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Frontier Markets

Nigerian Stock Exchange Weekly Report For The Week Ended 1 August 2014
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Miscellaneous

Ag tourism touted as way to boost rural economies
FREDERIC J. FROMMER – AP
With its sweet fruit-flavored liqueurs, a working farm and eccentric cast of characters— including a dancing lemon — Bloomery Plantation Distillery has attracted tourists from every U.S. state and countries as far away as Laos and Iceland.
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