John Lothian Newsletter: Wall Street has a problem with women. Here’s why you should worry; Regulators focus on opaque Treasury trading; CFTC to finish position limits rule in 2016, Massad says

Oct 23, 2015

First Read

Katie Burgoon, Trading Technologies – Gone But Not Forgotten: How The Floor Trader Mentality Can Prepare Everyone For Success
JohnLothianNews.com

“You would never have met a floor trader who did not live and breathe the markets every day. They literally could not wait for the alarm clock to go off every morning.”

Though the open outcry system of order execution has been relegated (mostly) to the history books, the trading floor mentality lives on in the hearts and minds of the thousands of former floor participants. And any one of them would say that the things that defined a floor trader – passion, a strong voice and even a confident swagger – can prepare anyone for a successful career. Katie Burgoon, who spent many years on the Chicago Board of Trade floor, now sits on the other side of the hiring line in her role as VP of global human resources at Trading Technologies. She says that, regardless of gender, years of service or role within a company, one should aim to channel the inner floor trader to find success.

Watch the video at MarketsWikiEducation.com »
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ALTSO Event Rocks City Winery
JLN Staff
There was much fun to be had at last night’s Rocktoberfest at City Winery, benefitting A Leg To Stand On, a non-profit organization that provides free orthopedic care to children with limb disabilities in the developing world. Industry players became guitar and saxophone players in a great lineup of bands that belted out classic rock and roll to a packed house and a full dance floor. ALTSO also raised money by auctioning off a variety of items, including autographed posters and baseball memorabilia as well as dream vacations. It was a great event for a great cause. Thanks to the co-chairs of the Chicago event, Chuck Mackie, Ray McKenzie and Michelle Giunti.

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Space is filling up – register today for FIA Expo 2015!
With over 30 sessions and 100 speakers, FIA Expo 2015 covers all aspects of current industry trends today and where the industry is headed tomorrow.
jlne.ws/1S0vTSL

****** Don’t miss EXPO, it is the conference of the year.

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Introduction to the Digital Era
SGX
How does PayPal earn revenue? What is the commercial value of cyber security? Learn more about the digital economy in the first of a series of seminars at SGX.
jlne.ws/201f0fW

***** What do you do after the introduction? Movie and dinner?

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Opinion: Jim Cramer loses big in this stock-picking test
By Michael Sincere – MarketWatch
Buying stocks based on an expert’s list is often a losing move
On April 6, 2015, CNBC host and best-selling author Jim Cramer wrote an article: “Jim Cramer’s Picks — Here are 49 Stocks to Buy Right Now,” published on TheStreet.com. Cramer made a strong case for the 49 stocks. “Every single one of these companies reported excellent last quarters, and with no exceptions their charts are pretty much perfectly made for this downturn,” Cramer wrote. Even if there was a correction or downturn, Cramer wrote that these stocks would do well.
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***** Losing money is not entertaining, but entertainment finance can lose you money.

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MarketsWiki

MarketsWiki Page of the Day
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MarketsWiki Recent Updates

People

Ellen R. Alemany; John Thain; William A. Porter; Antoine Shagoury; Thomas Krantz; Philippe Brassac; Francis Canterini; John Cryan

Companies, Organizations and Groups

Cinnober Financial Technology; CIT Group; Chicago Stock Exchange; ConvergEx Group, LLC; Calyon Financial, Inc.; Crédit Agricole S.A.

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69,773,502 pages viewed, 8,288 articles, 194,678 edits
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Lead Stories

Wall Street has a problem with women. Here’s why you should worry
By Meredith Jones – World Economic Forum
The number of women in the financial industry has been and remains remarkably low. According to a recent Morningstar report, women manage less than 2% of mutual fund assets. Nearly two thirds of the top 71 Silicon Valley venture capital funds have no senior female investment professionals, according to the Social & Capital Partnership.
jlne.ws/1Lq8WGa

Regulators focus on opaque Treasury trading
Joe Rennison in New York – FT
The $13tn US Treasury market likes to keep things hidden. That is a problem for US regulators trying to analyse what is driving buying and selling flows behind the market’s $500bn in daily volume.
jlne.ws/1PL249v

CFTC to finish position limits rule in 2016, Massad says
Risk.net (Subscription Required)
Controversial rule on commodity derivatives set to miss year-end target A long-awaited rule from the US Commodity Futures Trading Commission (CFTC) that would impose speculative position limits on commodity derivatives will not be ready this year. “I wouldn’t expect it to get done this year,” said CFTC chairman Timothy Massad in response to questions at the Risk USA conference in New York.
jlne.ws/1PFXCKa

Barclays chairman attacks banking’s bonus culture
Martin Arnold – FT
The chairman of Barclays has attacked the bonus system for investment bankers, arguing it encourages people to “cut corners”, in comments likely to cause consternation among his own staff.
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Nasdaq Seeks Banks as `Core Support’ in Derivatives Battle
Bloomberg
Nasdaq Inc. Chief Executive Officer Bob Greifeld says he isn’t backing down in his fight for a piece of the European futures market, after another competitor emerged last week.
Nasdaq’s London-based NLX market has been unable to win sizable share from entrenched derivatives markets owned by Deutsche Boerse AG and Intercontinental Exchange Inc. Now, London Stock Exchange Group Plc has confirmed that it’s starting a futures exchange that will list the same products and is doing so with six banks and the Chicago Board Options Exchange as shareholders.
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SunGard enhances data offering with Markit pricing to improve customers’ workflow
Sungard
SunGard’s Pricing and Data Services now includes the full portfolio of Markit fixed income data, giving customers access to customized data sets, pricing and validation.
jlne.ws/1i03Gyy

SAC Capital’s Steinberg Gets Insider-Trading Charges Dropped
Patricia Hurtado – Bloomberg
Six who pleaded guilty also cleared in insider prosecution
Steinberg had been sentenced to 3 1/2 years in prison
The U.S. dropped insider-trading charges against Michael Steinberg, a former fund manager at SAC Capital Advisors LP who was convicted by a federal jury, in the latest fallout from a major appeals court ruling that made such prosecutions more difficult.
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Large Money Managers Suffer Bruising Quarter; Profit at Franklin Resources falls sharply as assets, fees drop
By KIRSTEN GRIND – WSJ
Large money managers were bruised in the third quarter by market declines and investor outflows, the latest sign of the ills afflicting the U.S. mutual-fund industry.
jlne.ws/1Xo9AcS

LME confirms plan to introduce position limits
Reuters
The London Metal Exchange (LME) confirmed on Thursday plans to introduce limits on large positions for the first time to avoid market squeezes, initially on its new aluminium premium contract.
jlne.ws/1S0uNGx

Big Tech back in vogue on Wall Street
Richard Waters, Leslie Hook and Tim Bradshaw in San Francisco – FT
The sometimes fractious relations between Wall Street and Silicon Valley enjoyed a moment of harmony on Thursday, as a combined $100bn was added to the stock market value of three of the world’s biggest technology companies.
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Lawyer for accused ‘flash crash’ trader calls U.S. extradition request false
By Michael Holden – Reuters
The U.S. request to extradite London-based trader Navinder Sarao, accused of helping to spark the 2010 Wall Street “flash crash”, is “false and misleading” because it misrepresented the way markets work, his lawyer said on Thursday.
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CIT Group: wood from the trees
FT Lex
Can a chief executive be a success even if his company’s stock price lags behind? That is something departing CIT Group head John Thain will ponder in retirement when he visits the Thain Family Forest, a section of the New York Botanical Garden that he has endowed.
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US Treasuries sale delayed on ceiling fear
Robin Wigglesworth, US markets editor – FT
The US Treasury is postponing a Government note auction because of the looming debt ceiling, underscoring the dangers of an accidental financial and economic disaster as Congress stalls on approving a rise to the $18tn limit.
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Ex-SEC economist to testify on flash crash
Jane Croft – FT
A former chief economist of the US Securities and Exchange Commission is set to testify on behalf of a UK trader accused of playing a role in the flash crash of 2010 while trading from his bedroom.
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Regulatory

Finance watchdogs need to end roller coaster rulemaking
By Huw Jones – Reuters
Bank regulators need to break out of a loop where rules are tightened up after a crisis and relaxed too much when times are good, the boss of Britain’s financial watchdog said on Thursday.
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FDIC Sets New Swaps Rules in Bid to Prevent AIG-Type Meltdown
WSJ
Federal regulators took a big swing at trying to prevent the type of risk-taking that fueled bailouts of firms such as American International Group Inc., adopting a new rule requiring banks to collect more collateral for swaps transactions as a kind of insurance in case such trades go bad.
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Keynote Remarks of Chairman Timothy Massad before the Risk USA Conference
CFTC
Today, this framework is largely in place. The vast majority of transactions are centrally cleared. Trading on regulated platforms is a reality. Transaction data is being reported and is publicly available. And we have developed a program for the oversight of major market participants. But there’s more work to be done. So let me review where we are in each area.
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SIFMA, Joint Trades Oppose Paul Amendment to CISA
SIFMA
SIFMA and a coalition of associations today submitted a letter to the Senate expressing opposition to the Paul Amendment #2564, which if added to the Cybersecurity Information Sharing Act (CISA) would undermine the bill’s goal of facilitating cyber threat information sharing that is needed to protect sensitive data. The
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SIFMA Leads Joint Trades Letter Urging Congress to Raise Debt Limit
SIFMA
Today,SIFMA led a group of joint trade associations representing financial and business institutions in sending a letter to Congressional leadership urging Congress to raise the debt limit.
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ISDA Asia-Pacific Regulatory Profiles; October 2015
ISDA
This collection of profiles lists key institutions, regulatory milestones, key developments and ISDA submissions for the OTC derivatives markets in the following jurisdictions:
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derivatiViews: FRTB: Time Running Out
ISDA
At the end of this year, the Basel Committee on Banking Supervision plans to finalize its Fundamental Review of the Trading Book (FRTB). And the impact – based on recent analysis led by ISDA, GFMA and IIF – looks like it will be significant, with banks having to hold multiples more capital than they do today.
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Canadian Securities Regulators Publish Mutual Fund Fees Research
OSC
The Canadian Securities Administrators (CSA) today published A Dissection of Mutual Fund Fees, Flows and Performance, independent research prepared by Professor Douglas Cumming, Ontario Research Chair at the Schulich School of Business at York University, along with coauthors Sofia Johan and Yelin Zhang, also from the Schulich School of Business. The research was commissioned by the CSA to assess whether sales and trailing commissions influence mutual fund sales.
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Exchanges & Trading Facilities

Nasdaq acquires SecondMarket
By Leslie Hook in San Francisco and Philip Stafford in London – FT
Nasdaq has acquired SecondMarket as it expands its private tender offer services in an effort to get in early with Silicon Valley companies that are increasingly delaying their IPOs.
jlne.ws/1jYjaV3

SGX quarterly profit soars 28 per cent to $99m, News, News, AsiaOne Business News
business.asiaone.com
The Singapore Exchange (SGX) posted its best quarterly result in seven years, thanks to volatility in global markets.
The increased trading activity in the quarter boosted earnings in the securities business while the derivatives unit continued to record higher transaction volumes.
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Russell Investments contributes to LSE Group’s strong third quarter results
Digitallook.com
The London Stock Exchange Group has seen an 85% jump in revenue for the third quarter, driven by income from Russell Investment Management
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DGCX Collaborates With Pakistan Mercantile Exchange Ltd.
Mondovisione
The Dubai Gold & Commodities Exchange (DGCX), UAE’s leading derivatives bourse, and the Pakistan Mercantile Exchange Limited (PMEX), a pre-eminent derivatives exchange in Pakistan, today announced that they have agreed to create a forum to work together, share information, and bridge connections between the financial markets of Pakistan and UAE.
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The $63 Billion Market That Korea’s Stock Exchange Wants in On
Bloomberg
South Korea’s stock exchange is revamping its structured note offering as it taps into rampant demand for rival over-the-counter products that have fallen prey to shaky markets.
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Hedge Funds & Managed Futures

Wall Street’s brightest minds reveal the most important charts in the world
Myles Udland – Business Insider
Here they are: the most important charts in the world. As many of the charts in our latest collection from some of Wall Street’s top strategists show, questions right now center on what the future holds for the US economy, for emerging markets, and the Federal Reserve.
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Higher taxes hit William Hill earnings
Malcolm Moore and Nathalie Thomas in London – FT
William Hill shares fell more than 6 per cent in early trading after the bookmaker warned its full-year revenues would be towards the lower end of expectations, partly as a result of additional taxes on the UK gambling industry.
jlne.ws/1kz9LUx

Central banks urged to raise rates as asset bubble fears grow
Ferdinando Giugliano, Economics Correspondent – FT
Central banks that persist with ultra-low interest rates threaten to inflate asset bubbles and make it more difficult to respond to the next financial crisis, an influential report has warned.
jlne.ws/1MIjuyj

Inside De Beers’s Hunt for Africa’s Elusive Diamonds; In Kalahari Desert, miner attempts to uncover next big discovery—without which the industry faces diminishing output
By SCOTT PATTERSON – WSJ
Crouching in the sun-scorched sand, De Beers geologist Charles Skinner picked up an ashy, white cylinder of rock and looked for shimmering evidence that an ancient volcano was sitting below his feet, containing billions of dollars’ worth of diamonds.
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Was This Hedge Fund Billionaire’s Epic Argentina Clash Worth It?
Katia Porzecanski – Bloomberg
Leading presidential candidates signal they’d seek debt deal
Argentina has been fighting defaulted-debt creditors since ’01
When hedge-fund billionaire Paul Singer first sued Argentina over its defaulted bonds in 2003, he could hardly have expected to be mired in the same tussle 12 years later.
jlne.ws/1kzc0ak

Banks & Brokers

HSBC considers moving headquarters to US instead of Asia
InvestmentWeek
HSBC, Europe’s biggest bank by assets, is considering moving its headquarters to the US instead of Asia, as originally expected, according to reports.
jlne.ws/1OM6jCy

Thomson Reuters third-quarter net profit rises
Thomson Reuters
Thomson Reuters Corp (TRI.N) (TRI.TO) on Friday reported higher quarterly net profit even as revenue dipped, hurt by foreign currency, and the news and information company reaffirmed its full-year forecast.
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Credit Suisse to Exit All European Primary Dealer Roles
Jeffrey Voegeli – Bloomberg
Credit Suisse Group AG no longer wants to act as a market maker for European government bonds, the bank said.
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Clearing & Settlement

Bank of China becomes LCH.Clearnet’s first Chinese PPS Bank
www.chinadaily.com.cn
Bank of China Ltd London Branch becomes the first Chinese PPS (Protected Payments System) Bank of LCH.Clearnet Ltd.
According to Bank of China, the bank will be able to start providing PPS services in both Britain and the United States, offering post-trade settlement services to LCH.Clearnet’s existing clearing members across a wide range of asset classes of securities (including FX, interest rate swaps, bond repurchase agreements and derivatives, etc) in 18 currencies.
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Clearing trade body to register in Shanghai
Futures & Options World
CCP12 said it decided to register as a non-profit organization in the Shanghai pilot free trade zone.
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Revised Swaps Rule to Spare Big Banks Billions in Collateral
Jesse Hamilton, Silla Brush – Bloomberg
Wall Street banks will escape billions of dollars in additional collateral costs after U.S. regulators softened a rule that would have made their derivatives activities much more expensive.
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Technology

Why Corporate Boards Are Picking Women to Fill Cybersecurity Posts
Anders Melin, Jeff Green – Bloomberg
While men built tanks, women crunched data, now seen as vital
Two thirds of major cybersecurity board spots go to women
Earlier this year, American International Group Inc. added Linda Mills to its board, attracted partly by her expertise in cybersecurity. In February, Wells Fargo & Co. selected Suzanne Vautrinot for its board for similar reasons. Before that, Walgreens Boots Alliance Inc. picked Janice Babiak.
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Eze Software Group To Acquire TKS Solutions, LLC
Business Wire
Eze Software Group, a premier provider of global financial technology, has signed a definitive agreement to acquire TKS Solutions, LLC, a Mount Kisco, N.Y.-based specialty software provider of shareholder and partnership accounting tools, for an undisclosed amount. The deal is expected to close next month.
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Continuum Provides Global Connectivity To MarketDelta Cloud – Exclusive Partnership For Market Data And Trade Routing
Mondovisione
Continuum, CQG’s enterprise API division, today announced its exclusive partnership with MarketDelta to power MarketDelta’s trading and order management application, MarketDelta Cloud. CQG will provide global market data and trade execution capabilities to the MarketDelta Cloud platform through its flagship API, Continuum Connect.
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Cloud services bolster Microsoft results, shares soar
BY DEVIKA KRISHNA KUMAR AND ARATHY S NAIR – Reuters
Microsoft Corp (MSFT.O) reported better-than-expected quarterly adjusted revenue for the ninth quarter in a row, boosted by burgeoning demand for its cloud products, sending its shares soaring in after-hours trading on Thursday.
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SunGard to Announce Third Quarter 2015 Results on November 5, 2015
Sungard
SunGard Data Systems Inc. (“SunGard”), one of the world’s leading financial software companies, announced today that it will release financial results for the third quarter ended September 30, 2015 on the morning of Thursday, November 5, 2015. Because of the pending merger with Fidelity National Information Services, Inc. (“FIS”), the Company will not be holding a call to discuss the financial results.
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Enforcement

Credit Suisse, Barclays could pay up to $150m to settle ‘dark pool’ claims
By Christopher M Matthews and Bradley Hope, WSJ
Credit Suisse and Barclays are in discussions to pay as much as $150 million combined to end several investigations and one lawsuit alleging improprieties related to their “dark pools,” according to people familiar with the matter.
jlne.ws/1hZZnDo

SEC Announces Enforcement Results For FY 2015
SEC.gov |
The Securities and Exchange Commission today announced that in fiscal year 2015, it continued to build a strong record of first-of-their-kind cases that spanned the spectrum of the securities industry.
In the fiscal year that ended in September, the SEC filed 807 enforcement actions covering a wide range of misconduct, and obtained orders totaling approximately $4.2 billion in disgorgement and penalties. Of the 807 enforcement actions filed in fiscal year 2015, a record 507 were independent actions for violations of the federal securities laws and 300 were either actions against issuers who were delinquent in making required filings with the SEC or administrative proceedings seeking bars against individuals based on criminal convictions, civil injunctions, or other orders.
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Environmental & Energy

Troubled Energy Companies Fuel Moody’s Watch List
By MATT JARZEMSKY – WSJ
A Moody’s Investors Service watch list of junk-rated companies is the longest it’s been in more than five years, and the beleaguered oil-and-gas industry accounts for a good chunk of it.
jlne.ws/1MInMG3

Study Finds the Warmer It Gets, the More World Economy Hurts
With each upward degree, global warming will singe the economies of three-quarters of the world’s nations and widen the north-south gap between rich and poor countries, according to a new economic and science study.
jlne.ws/1MctSUN

Diesel cars emit up to four times more toxic pollution than a bus, data reveals
By Damian Carrington – The Guardian
A modern diesel car pumps out more toxic pollution than a bus or heavy truck, according to new data, a situation described as a “disgrace” by one MEP.
jlne.ws/1hY1fwf

Asia-Pacific

Stocks, more and Golf: China’s Ruling Party Targets Temptations
Bloomberg News
New code of conduct puts limits on Communist cadres’ behavior
Party looking to shore up morals amid anti-graft campaign
China’s Communist Party is looking to damp the temptation among its 88 million members to play the stock market.
jlne.ws/1S0uJqv

Singapore private home prices fall to lowest in 4-1/2 years
Reuters
Prices of Singapore’s private homes fell for the eighth straight quarter to 4-1/2-year lows due to government-introduced cooling measures, indicating sluggish property markets will add to deflationary pressures in the city-state.
jlne.ws/1PFZAdF

China to expand financial reform, give markets more say – Premier Li
Reuters
China will push forward financial reform and increasingly promote the role of the market, the official Xinhua news agency said late on Thursday, citing Premier Li Keqiang.
jlne.ws/1PFZF0U

China’s Central Bank Cuts Rates
WSJ
BEIJING—China’s central bank late Friday cut both interest rates and the reserve-requirement ratio for banks, in a bid to revive slowing economic growth.
The central bank also scrapped its cap on deposit rates for China’s commercial lenders and rural cooperatives, a key move toward the government’s long-promised interest-rate liberalization.
jlne.ws/1jDLMmZ

Frontier Markets

Global refugee bonds can match historic crisis
beyondbrics – FT.com
Financial markets, both debt and equity, could be mobilised for emerging economy frontline states to provide a new, long-term source for immediate infrastructure and social needs and future professional training and employment entry. Sovereign refugee bonds would be a logical start, building on existing investor local and foreign-currency portfolios across emerging market regions. Issues could carry partial guarantees from the World Bank and other development lenders, but more creditworthy governments are in a position to continue normal borrowing on commercial terms that could be discounted with a commitment to carefully track the proceeds for a range of refugee hosting and resettlement purposes.
jlne.ws/1PFZToH

RBI unveils gold monetisation scheme norms; The minimum deposit shall be raw gold equivalent to 30 grams of gold of 995 fineness
Business Standard
To cut down on the import bill, the Reserve Bank of India (RBI) on Thursday announced a gold monetisation scheme (GMS) that allows individuals, trusts and mutual funds to deposit gold with banks and earn an interest on it. Prime minister Narendra Modi will launch the scheme on November 5.
jlne.ws/1OW0y3R

Solar power to light the way for Africa as low-carbon campaign launches
By John Vidal and Clár Ní Chonghaile – The Guardian
Kofi Annan, Bob Geldof, Richard Branson and international business leaders have joined politicians from 14 African countries to launch a global campaign to bring solar power to the 620 million people on the continent who must still use kerosene, candles and wood to light their homes and cook.
jlne.ws/1Xn2JjM

How to Distinguish the Right Emerging Markets to Invest in
ACN Newswire
Rachel Ziemba, Senior Director of Research, Emerging Markets of Roubini Global Economics, and a speaker at the marcus evans Middle East Investors Summit 2015 taking place in Dubai, UAE, 15 – 16 November, discusses what the current global trends affecting emerging markets are.
jlne.ws/1PFZS41

Miscellaneous

Hamptons Mansions Pile Up on Market as Luxury-Home Sales Dip
Oshrat Carmiel – Bloomberg
Inventory of high-end houses on the market climbs 34 percent
Median luxury-home price falls 18 percent to $5.3 million
New Yorkers who want to buy a high-end retreat in the Hamptons have plenty of options to choose from.
jlne.ws/1S0vakE

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