First Read

Face to face with Matthew Scharpf
Eurex
Mr. Scharpf, how long have you been with Eurex Exchange and what did you do before you joined our company?
I joined Eurex in December 2013. Prior to coming on board at Eurex, I spent three years at CQG, a Denver Colorado-based financial markets technology firm, where I was responsible for selling trading and charting software to traders in the Midwestern U.S. Before my time at CQG, I spent seven years trading treasury, agricultural, and energy futures for a Chicago-based proprietary trading shop. Preceding my trading career, I had significant stints as a secondary school mathematics teacher, professional musician, soccer coach, and mechanical engineer. What a long strange trip it’s been!
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***** See one of the best presentations at our MarketsWiki Education World of Opportunity Series by Matt Scharpf of Eurex

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Global rice shortage caused by El Nino threatens price crisis; Experts say a bad monsoon season could see grain costs spiral by the end of the year
Gabriel Samuels – Independent
The world is expected to suffer a major rice shortage after global production was hit by extreme weather patterns – potentially fuelling an international price crisis.
goo.gl/Cf81I9

***** If markets are allowed to work, drastic predictions like this are more about selling papers than economic reality. Crisis comes when we intervene in the market discovery and risk transfer process.

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Rule on Arbitration Would Restore Right to Sue Banks
By JESSICA SILVER-GREENBERG and MICHAEL CORKERY – NY Times
The nation’s consumer watchdog is unveiling a proposed rule on Thursday that would restore customers’ rights to bring class-action lawsuits against financial firms, giving Americans major new protections and delivering a serious blow to Wall Street that could cost the industry billions of dollars.
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****** Given the level of enforcement noise coming from Wall Street, a move like this is to be expected. Property rights deserve good legal protections. Arbitration has limited protection of investor property rights. It has also reduced costs for both brokers and investors and made bringing a case less expensive.

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‘I’m Sorry,’ Says Man Who Claimed To Be Bitcoin’s Creator
NPR
Days after he published a lengthy blog post in which he claimed to be “Satoshi Nakamoto,” the alias used to create the bitcoin crypto-currency, Australian Craig Wright has erased the post and replaced it with one that says he doesn’t “have the courage” to prove his claim.
jlne.ws/1UCl50X

***** I don’t have the courage to prove I am Batman, but I am really Batman.

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NASDAQ COO ON BLOCKCHAIN AND FINTECH
NASDAQ
Nasdaq President and COO Adena Friedman participated in a panel discussion at Milken Institute’s Global Conference.
goo.gl/vbfcPQ

***** If you added the world Trump to the headline, you would have all the clickbait words in one place.

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Google’s neural network is binge reading romance novels
Engadget
The Big G wants its app to be more conversational, so it’s feeding a neural network with steamy sex scenes and hot encounters. According to Buzzfeed News, the network has been devouring a collection of 2,865 romance novels over the past few months, with saucy titles like Fatal Desire and Jacked Up. It seems to be working too:
jlne.ws/1UCld0u

***DA: I hear Google is going off on a spa weekend in Napa with gal pals Apple and Amazon.

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Crackdown on golf alarms fund industry; Hospitality guidance from UK regulator causes widespread doubt and anxiety about corporate perks
by: Aime Williams
Golf has become a dirty word in the UK asset management market. Since the Financial Conduct Authority announced two weeks ago that investment managers were spending too much time wooing clients with lavish corporate jollies, the market has gotten itself into something of a flap.
/goo.gl/PjneQ7

****** I would like to see what a corporate jolly looks like. I have only been invited to corporate shindigs and an occasional boondoggle.
***SR: Interestingly, another definition of boondoggle is “a braided cord worn by Boy Scouts as a neckerchief slide, hatband, or ornament.” No one wonder John Lothian loves boondoggles.

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Thursday’s Top Three
Yesterday’s top story was Hedge Fund Managers Lose Their Swagger. Seems every week there is a story of the billions leaving hedge funds that I’m amazed they still have two nickels or Tubman’s to rub together. In second, was the story Regulators Want to Slow Runs on Derivatives. Rounding out the top three was Nasdaq CEO Bob Greifeld: Slow and Steady

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In Case You Missed It
We posted three nice feature stories recently you may have missed, but shouldn’t have. All three are cocktail and watercooler fodder. Jim Kharouf’s piece on Divento Academy and the growing field of trading schools in London, The Right Stuff: Divento Academy Looks to Train the Next Generation of Traders, Sarah Rudolph’s article on women in business and some surprising stories about them in Smart Money, Smart Women: What Successful Women Say About The Possibilities; and John Lothian’s look at the new art in the CBOT building New Art Just the Latest Amenity in the CBOT Building

PRMIA Chicago and CAIA present:
CTAs and Commodity Indices: A Fresh Perspective

Thursday, May 19, 2016 11:45 a.m. – 1:00 p.m.

>>> Register now

Douglas Ashburn, COO and Editor-at-Large, John J. Lothian & Company, Inc.
Topic: Is 2016 a “Make-or-Break” Year for Managed Futures?
During the financial crisis, managed futures enjoyed solid returns while equity markets plunged. As equity markets turn bearish in 2016, will managed futures have another run of out-performance, and if not, what will the future hold for this asset class?

Hilary Till, Principal, Premia Capital Management, LLC
Topic: What are the Sources of Return for CTAs and Commodity Indices?
Ms. Till will review structural sources of returns for CTAs and Commodity Indices. The presentation is based on a recent Journal of Wealth Management article, “What Are the Sources of Return for CTAs and Commodity Indexes? A Brief Survey of Relevant Research.” The presentation will cover the long-term return sources for both managed futures programs and commodity indexes; the investor expectations and the portfolio context for futures strategies; and how to benchmark these strategies.

To register for the event, click HERE

Sponsored
by:
CAIAPRMIA

 

Lead Stories

OTC derivatives shrink to lowest level since financial crisis; Banks utilise trade compression strategy which has been ‘key driver’ in fall, according to BIS
Joe Rennison in New York
A chunk of the global derivatives market has shrunk to its lowest level since the financial crisis, according to data released by the Bank for International Settlements, driven by its attempts to limit the regulatory costs imposed on the instruments.
/goo.gl/AXOOpx

Bats Global Markets doubled profit in first quarter
Kansas City Star
The Lenexa-based operator of the nation’s No. 2 stock exchange earned $30.1 million; It became a publicly traded company in April when it launched trading of its shares on its own exchange
Bats Global Markets, the Lenexa-based operator of the nation’s second-largest stock exchange, doubled its earnings in the first three months of the year compared with a year ago.
goo.gl/3r5O6N

Investors lose $24 billion a year on negative-yielding bonds
By Sue Chang- MarketWatch
Bonds issued by governments around the world that yield less than zero result in investors losses of about $24 billion a year, according to Fitch Ratings.
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**JK: And we’re worried about Flash Boys?

Singapore banks become a hotbed for ‘fintech’; Government support and financial experience make city-state fertile ground
by: Jeevan Vasagar in Singapore and Don Weinland in Hong Kong – FT
Banks have long used data analysis to predict market movements, investment returns, even risks of customer fraud. But Singapore’s DBS Bank is one of those applying predictive analytics to internal functions — using pattern-detecting software to spot rogue traders, and other unusual staff behaviour.
/goo.gl/djx6fE

ISDA chief demands regulatory clarity for margin model; O’ Malia demands regulators to recognise ISDA’s standardised model for calculating margin.
By Joe Parsons – The Trade
The head of International Swaps and Derivatives Association (ISDA) has called for greater clarity from regulators on a new standardised model for calculating margin requirements.
goo.gl/RTrN5p

Trump’s ascendancy poses risks for Wall Street
Adam Shell, USA TODAY
The political ascendancy of billionaire businessman Donald Trump and his anticipated clash for the White House with Hillary Clinton is fraught with risk for Wall Street. Investors fear a surprise presidential win for the upstart Trump due to his unpredictability and policy proposals deemed a threat to financial markets. Yet what worries Wall Street even more is the prospect of the former first lady winning by a landslide and paving the way for the Democrats to regain full control of Congress.
/goo.gl/ikkVIo

Brevan Howard moves into mass market; Elite hedge fund firm branches out to target retail investors
by: Lindsay Fortado, Hedge Funds Correspondent – FT
Hedge fund firm Brevan Howard, which is in the midst of its third down year, is branching out to target retail investors in a bid for new investment offerings.
/goo.gl/GE1lhN

Goldman Sachs Cuts More Jobs in its Securities Business; Latest cuts bring reduction in debt-trading group to 10% of staff this year
By JUSTIN BAER – WSJ
Goldman Sachs Group Inc. is trimming additional staff from its sales and trading division, people familiar with the matter said, marking another wave of cost cuts for the Wall Street firm as it wades through a slump at some of its key businesses.
goo.gl/wGfl5f

US stock funds suffer $11bn of outflows; Redemptions since the beginning of the year top $60bn
by: Eric Platt and Joe Rennison in New York – FT
US equity funds suffered their largest redemptions since the start of the year as investors sought the safety of cash, government debt and gold as sentiment continued to sour during the first week of May.

U.S. issues rule requiring banks to identify shell company owners
BY YEGANEH TORBATI AND ELIZABETH DILTS – Reuters
The Obama administration is issuing a long-delayed rule requiring the financial industry to identify the real owners of companies and proposing a bill that would require companies to report the identities of their owners to the federal government, U.S. officials said on Thursday.
goo.gl/0cnqKQ

Brexit Uncertainty Drags U.K. Economy to Near Stagnation
Jill Ward – Bloomberg
Services activity gauge falls to lowest level in over 3 years; Combined surveys suggest economy barely grew in April
U.K. companies are feeling the strain from the upcoming European Union referendum, with a gauge of services falling to its lowest level in more than three years in April.
goo.gl/6E4CjX

Hong Kong Stock Exchange Calls Out J.P. Morgan; Regulators included the bank on a list of sponsors for deals whose applications were returned
By KANE WU – WSJ
Hong Kong’s stock exchange cast some potentially unwelcome attention on J.P. Morgan Chase & Co. after the exchange returned a Chinese company’s application for a spinoff.
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Regulatory

Basel banking supervision edict stretches banks’ risk data governance
ComputerWeekly.com
Banks are under pressure to meet the Basel Committee on Banking Supervision (BCBS) 239: Principles for effective risk data aggregation and risk reporting (RDARR), but it is not easy to get the policy and technical elements right, such as governance and accuracy.
jlne.ws/1OgI2jQ

Esma hits back at “overly burdensome” Mifid II phase-in; Agency resists EC proposal for annual liquidity review
Fiona Maxwell – Risk.net
The European Securities and Markets Authority (Esma) is warning against parts of a European Commission proposal to phase in Europe’s incoming trading and transparency rules, which would see the full effect of the requirements being pushed back four years. Esma says in an opinion issued on May 3 that it backs a gradual rollout of the liquidity determinations and the threshold at which a carve-out from the second Markets in Financial Instruments Directive (Mifid II) would apply. But it opposes the…
goo.gl/j27g70

Central banks careful to avoid easing becoming squeezing
By Elizabeth Pfeuti – Financial News
Quantitative easing is not about to become quantitative squeezing – that is the assurance of European central banks to the bond market.
goo.gl/M4zpdY

US launches new attack on dirty money; Names of tax evaders, money launderers and terrorists targeted
by: Barney Jopson in Washington – FT
The US has launched a fresh crackdown on illicit money with new measures intended to stop tax evaders, money launderers and terrorists from concealing their identities in the US financial system.
/goo.gl/j0xnWF

Self-Regulatory Organization (SRO) Rulemaking and National Market System (NMS) Plans
SEC

    • BATS: Notice of Designation of a Longer Period for Commission Action on a Proposed Rule Change, as Modified by Amendment Nos. 1 and 2, to List and Trade Shares of the Pointbreak Diversified Commodity Strategy Fund of the Pointbreak ETF Trust under BATS Rule 14.11(i), Managed Fund Shares (Release No. 34-77770; File No. SR-BATS-2016-16)

 

    • ICC: Notice of Filing of Proposed Rule Change to Revise the ICC End-of-Day Price Discovery Policies and Procedures (Release No. 34-77771; File No. SR-ICC-2016-007)

 

    • ICC: Order Approving Proposed Rule Change to Revise the ICC Operational Risk Management Framework (Release No. 34-77769; File No. SR-ICC-2016-003)

 

/goo.gl/h0yuDn

Measure Twice, Cut Once
ISDA
Last week, I was fortunate enough to be invited once again to testify before the House Committee on Agriculture’s Subcommittee on Commodity Exchanges, Energy, and Credit on the impact of new capital and margin rules. This came at an extremely opportune time. Margining requirements for non-cleared derivatives will be rolled out for the largest banks from September, while core elements of the Basel reforms are still evolving.
/goo.gl/B3SkVu

SIFMA Market Close Recommendations for the US Memorial Day and UK Spring Bank Holidays
SIFMA
SIFMA made holiday recommendations for the U.S., the UK, and Japan in observance of the U.S. Memorial Day and the UK Spring Bank Holidays.
goo.gl/svYulB

Exchanges & Trading Facilities

Bats Reports First Quarter Adjusted Earnings† Growth of 77%; Sets Records for Net Revenue, Adjusted Earnings; Announces Quarterly Cash Dividend of $0.08 per share
BATS
Bats Global Markets, Inc. (Bats: BATS), a leading global operator of exchanges and services
for financial markets, today reported earnings of $30.1 million and adjusted earnings of $35.6 million for the first quarter ended March 31, 2016, an increase of 77% in adjusted earnings† from $20.1 million a year ago. Adjusted earnings, which excludes tax-adjusted amortization and one-time costs, rose to $0.37 per diluted share from $0.21.
goo.gl/6XuuYo

Bats reports record revenues in first quarter; Bats Global Markets reports “quarterly earnings record” with revenues reaching $112 million in the first quarter this year.
By Hayley McDowell – The Trade
Bats Global Markets’ first quarter results revealed a 35% increase in overall net revenues compared to the first quarter last year, a record for the exchange.
goo.gl/NBwpk5

ICAP Electronic Markets Volumes – April 2016
ICAP
goo.gl/2VgYrX

Nasdaq April 2016 Volumes
By GlobeNewswire
Nasdaq (Nasdaq:NDAQ) today reported monthly volumes for April 2016, on its investor relations website.
goo.gl/h4JK48

Nasdaq Stockholders Elect Members to Board of Directors
By GlobeNewswire
Nasdaq (Nasdaq:NDAQ) stockholders today elected all nominated directors at the Annual Meeting of Stockholders. Board members Charlene T. Begley
goo.gl/Equtou

Moscow Exchange: CCP-Cleared Repo Achieves Record Volume Of RUB 13.3 Trln In April
Mondovisione
In April 2016, trading volumes of repo with the CCP reached RUB 13.3 trln, a record since its launch in February 2013. The proportion of repo turnover cleared across the CCP accounted for 62% of the total repo market. The average daily trading volume was RUB 632.4 bln, up 220% YoY.
goo.gl/wjd5aq

Technology

Australian backtracks on promise to prove he is bitcoin creator; Craig Wright faced widespread scepticism over his claim he was Satoshi Nakamoto
by: Daniel Thomas in London
The Australian computer scientist who claims to be the enigmatic founder of bitcoin has backtracked on promises to prove his identity, claiming he did not have the “courage” to do so in the face of intense public scrutiny.
/goo.gl/UWt39P

Sapient Global Markets Introduces RegRecon, Enhancing Matching, Reconciliation and Resolution for Regulatory Reporting
Press release
As regulators require institutions to establish processes for identifying and resolving data discrepancies, trade reconciliation tools are essential for gaining a fast, accurate understanding of exposures and enable firms to efficiently monitor risk and manage collateral.
jlne.ws/1NkMPFS

New ‘cable’ trading: tech could boost landlocked FX cities
By Anirban Nag – Reuters
The dominance of financial centres such as London, New York and Tokyo in the $5 trillion-a-day global currency market may face challenges from landlocked cities as new technology erodes the advantage offered by high-speed undersea cables.
goo.gl/AJVaeb

Bitcoin ‘creator’ backs out of Satoshi coin move ‘proof’
BBC
The Australian entrepreneur who has claimed to be the inventor of Bitcoin has reneged on a promise to present new “proof” to support his case.
goo.gl/eDLDPd

David Rutter: gambling on blockchain and a Treasuries revolution; Former BrokerTec chief says technology can transform the financial markets
Tom Osborn – Risk.net
When David Rutter ran US Treasury trading platform BrokerTec, he had a neat way of telling whether a trader preferred his platform over rival eSpeed. On a sales visit to a bank, he’d throw them a stress ball and see whether they caught it with their left or right hand. Then he’d check which side of the desk their BrokerTec and eSpeed keypads were on. If the BrokerTec keypad was on the wrong side, he’d take his salesmen outside and give them hell. That zeal helped propel BrokerTec from a 16% share…
goo.gl/KQDeJG

Politics

Donald Trump’s Idea to Cut National Debt: Get Creditors to Accept Less
By BINYAMIN APPELBAUM – NY Times
One day after assuring Americans he is not running for president “to make things unstable for the country,” the presumptive Republican nominee, Donald J. Trump, said in a television interview Thursday that he might seek to reduce the national debt by persuading creditors to accept something less than full payment.
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How to Trump-proof your portfolio; You would be a fool to base your investment choice on free-market theories alone
Gillian Tett
by: Gillian Tett
This year investors have grappled with a plethora of global mysteries: Brexit, war in the Middle East, negative interest rates, energy prices, the Chinese debt bubble, Russian President Vladimir Putin’s policymaking and drama in Brazil.
/goo.gl/NHVh3I

Trump raises prospect of replacing Yellen; Likely Republican nominee says it would be appropriate to change ‘very capable’ Fed chair
by: Sam Fleming in Washington – FT
Donald Trump would probably replace Janet Yellen as Federal Reserve chair if he wins the presidential election, the presumptive Republican nominee said on Thursday.
/goo.gl/lswIKQ

Trump’s deportation plan could slice 2 percent off U.S. GDP: study
BY LUCIANA LOPEZ – Reuters
Donald Trump’s vow to round up and deport all of America’s undocumented immigrants if he is elected president could shrink the economy by around 2 percent, according to a study to be released on Thursday by conservative think tank the American Action Forum.
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Trump Names Hedge Fund Manager as National Finance Chairman
Jennifer Jacobs, Dakin Campbell – Bloomberg
Just two days after locking up the Republican presidential nomination, Donald Trump is moving quickly to build a fundraising operation capable of reeling in hundreds of millions of dollars he’ll need to win the White House.
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Hedge Funds & Managed Futures

Is Warren Buffett Right About Hedge Funds?;
By MIRIAM GOTTFRIED – WSJ
Warren Buffett went on a rant against hedge funds at Berkshire Hathaway annual meeting last weekend. The “Oracle of Omaha” argued that hedge fund fees are a big drain on returns and that investors would be better off just putting their money in a low-fee index fund that tracks the S&P 500.
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Fed Officials Leave Door Open to June Hike If Justified by Data
Vivien Lou Chen, Jeanna Smialek, Steve Matthews – Bloomberg
Four regional Fed presidents speak about outlook for economy
June FOMC still a `live’ meeting for move if economy on track
Four regional Federal Reserve presidents said they were open to considering an interest-rate increase in June, speaking on the eve of a monthly U.S. jobs report that could indicate whether the economy can handle a hike.
goo.gl/cP2wXU

Betting and investment both require skill and luck; Big data and computational power help analysis in each field, writes Adam Kucharski
by: Adam Kucharski – FT
When I was a PhD student, I would get emails about companies looking to hire mathematicians. Most were engineering firms or banks but occasionally something else appeared. One firm described itself as a “sports research consultancy”. Details were sparse, but it seemed to be searching for people with advanced statistical knowledge — and an interest in the gambling industry.
/goo.gl/BFkky0

Wall Street’s rate view gets further from Fed’s
By ELIZA RONALDS-HANNON AND CATARINA SARAIVA Bloomberg News
Economists extended their deviation from the Federal Reserve in forecasting the path of U.S. policy tightening as they lowered predictions for how high the central bank will be able to lift interest rates.
goo.gl/hp6pvv

MetLife to Redeem Most of $1.8 Billion in Hedge Funds Amid Slump
Katherine Chiglinsky, Emma Orr – Bloomberg
Some hedge funds are `too inconsistent,’ investment chief says; Goulart says redemption process could take a couple years
MetLife Inc., the largest U.S. life insurer, said it’s seeking to exit most of its hedge-fund portfolio after a slump in the investments.
goo.gl/sgIv4T

Banks & Brokers

JP Morgan names Hudson head of markets execution
BY PHILIP SCIPIO – Reuters
JP Morgan named David Hudson as global head of markets execution, reporting to Daniel Pinto, according to an internal memo obtained by IFR. He will also join the bank’s investment banking management team.
goo.gl/4aFMJV

Numis names co-CEOs as Hemsley prepares to step aside
By Philip Georgiadis and Lucy Burton – Financial News
Numis’s long-serving chief executive and founder Oliver Hemsley is to step down later this year after more than 25 years at the helm of the independent stockbroker.
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It’s not a good time to be a Goldman Sachs trader
By Kevin Dugan – NY Post
Goldman Sachs has slashed 10 percent of its debt traders so far this year — a total that’s grown amid rough bond markets and plummeting revenue, The Post has learned.
goo.gl/XW60X5

Clearing & Settlement

Users of Listed Options Benefit from Changes to DOL Fiduciary Rule
OCC
On April 6th, the Obama Administration unveiled the Department of Labor’s fiduciary rule, which is designed to transform the way the financial services industry delivers retirement savings advice. We are gratified that the final rule moved away from limiting the ability of investors to hold listed options in their retirement accounts. We are concerned that the final rule may limit the ability of brokers to provide education regarding listed options to self-directed investors. We will continue to study the rule, and if appropriate, continue to fight aggressively on behalf of the users of our markets.
goo.gl/U6mXou

TriOptima Completes First triReduce Compression Cycle for Cleared Euro Interest Rate Swaps in Eurex Clearing
Press Release
TriOptima, the award-winning post trade infrastructure provider, announces that Eurex Clearing members completed the first successful triReduce compression cycle for cleared euro (EUR) interest rate swaps (IRS). This was the first collaboration between Eurex Clearing and TriOptima.
jlne.ws/1OgI6Qp

RBI liberalises institutional play in OTC derivatives market
MoneyControl
At present, it is necessary that at least one of the two parties in the swap is either a bank or the RBI itself or an entity regulated by it. Any other regulated entities are not allowed to deal in IRS.
jlne.ws/1OgIej5

EU Legislation Imposing Clearing Obligation for Credit Default Swaps Published
Lexology
On April 19, 2016, a Commission Delegated Regulation on central clearing for credit default swaps supplementing the European Markets Infrastructure Regulation was published in the Official Journal of the European Union. Under the Regulation, two classes of credit default over-the-counter derivatives are subject to the clearing obligation under EMIR: iTraxx Europe Main and iTraxx Europe Crossover.
jlne.ws/1OgIheC

Finally, the margin of safety – New Australian laws passed, new Australian regulation made and new ISDA margining documents published
Lexology
The long-awaited new Australian laws which allow Australian banks, funds, insurers, superannuation entities and other Australian market participants to access the increasingly regulated international risk-management marketplace have been made. In addition, new internationally compliant margining documents have been published. For Australians that were unable to use some offshore clearing markets, and those subject to the looming international margining deadlines, this will be of great relief.
jlne.ws/1OgIwq7

MSCI Inc (NYSE:MSCI) Analyst Rating Perspective
The Post
Both the crowd and Wall Street have recently provided their opinions of MSCI Inc (NYSE:MSCI) shares. Beta Systems research tracks crowd sourced sentiment and gives consensus ratings on stocks. These ratings are given by investors, financial professionals and individuals who have an interest in the company. Unlike Sell-side equity research ratings, these are sources come from independent stock enthusiasts as opposed to large brokerage firms.
jlne.ws/1OgJ4fB

Indexes & Products

MSCI May Semi-Annual Index Review Announcement Scheduled for May 12, 2016
Press Release
MSCI Inc. (NYSE:MSCI), a leading provider of research-based indexes and analytics, will announce the results of the May 2016 Semi-Annual Index Review for the MSCI Equity Indexes – including the MSCI Global Standard, MSCI Global Small Cap and MSCI Micro Cap Indexes, the MSCI Global Value and Growth Indexes, the MSCI Frontier Markets and MSCI Frontier Markets Small Cap Indexes, the MSCI Global Islamic and MSCI Global Islamic Small Cap Indexes, the MSCI Pan-Euro and MSCI Euro Indexes, the MSCI US Equity Indexes, the MSCI US REIT Index, and the MSCI China A Indexes. All changes will be made as of the close of May 31, 2016.
jlne.ws/1OgJkvc

Limit Risks and Diversify with Multi-Factor, Smart-Beta ETFs
Nasdaq
Exchange traded funds (ETFs) that implement smart-beta strategies help investors move away from traditional market-cap methodologies to generate better returns without paying for the high costs associated with an active manager.
jlne.ws/1OgJG4S

First Asset launches smart beta ETF on Canadian equities
ETF Strategy
Canadian exchange-traded fund provider First Asset Investment Management has launched the First Asset MSCI Canada Quality Index Class ETF (FQC) on the Toronto Stock Exchange. The fund provides a smart beta equity exposure to blue-chip Canadian companies.
jlne.ws/1OgJKlg

How Much Does it Cost to Invest in UK Equity Smart…
Morningstar
Strategic-beta, also called smart beta, ETFs offering exposure to the UK all-cap market are more expensive than their market cap weighted peers thanks to higher transaction costs
jlne.ws/1OgJUc8

Enforcement

Deutsche Bank says cooperating with Italian authorities on bond sale investigation
Reuters
Deutsche Bank (DBKGn.DE) said on Friday it is cooperating with authorities in Italy in an inquiry regarding the sale of Italian sovereign bonds in 2011.
goo.gl/J53SKl

Environmental & Energy

Majority of Trump Voters Believe in Climate Change
Climate Nexus
Despite the presidential candidate’s history of climate change denial, a majority of Donald Trump voters actually believe global warming is real and man-made.
/goo.gl/HSNlvQ

Survey: Texans Support a Statewide “Clean Energy” Plan
By Jim Malewitz – The Texas Tribune
When it blocked President’s Obama’s Clean Power Plan, the U.S. Supreme Court let Texas off the hook — at least for now — on developing a plan to boost its use of cleaner-burning energy.
/goo.gl/CfaWpC

Plans for coal-fired power in Asia are ‘disaster for planet’ warns World Bank
By Suzanne Goldenberg – The Guardian
Plans to build more coal-fired power plants in Asia would be a “disaster for the planet” and overwhelm the deal forged at Paris to fight climate change, the president of the World Bank said on Thursday.
goo.gl/dtpxVY

Asia-Pacific

China’s commodities trading frenzy fades
WINNIE ZHU AND FEIWEN RONG – Bloomberg News
The fever that’s gripped Chinese commodity markets is easing.
Speculators who traded 1.7 trillion yuan ($336-billion) futures in a single day last month have retreated as fast as they advanced. Trading volumes across the country’s three biggest exchanges are more than half of what they were at their peak on April 22 and back to levels similar to a year ago, according to data compiled by Bloomberg. The amount of money changing hands on a daily basis has shrunk to $114-billion (U.S.).
goo.gl/SQTA79

China Evicts Investment Firms Amid Fears of Unrest
Bloomberg News
Growing protests have unnerved local governments nationwide; More than 1,000 such firms have failed, with more to come
China’s authorities, seeking to forestall potential social unrest due to growing failures of investment firms and online lenders, are ordering many to break leases and close their storefronts on busy streets — lest they become magnets for protesters.
goo.gl/7G8LLI

Big but brittle
Economist
China needs to free up its financial system, even if it hurts, says Simon Rabinovitch
THE HEAD OFFICE of Sheyang Rural Commercial Bank is a reassuringly solid building. Its grey stone façade and arched doorways convey a feeling of prosperity, a splash of high finance in this small county town in eastern China where grain fields nip at the edges of factories. But look a little closer, and you will still find a couple of scars from the bank’s near-collapse two years ago. One is a digital sign running in a loop over the entrance: “Treasure your hard-earned money, avoid the temptation of high returns, stay far from illegal financial schemes.” The second is a prize draw for cars, a pair of gleaming white Kias on a red platform outside the bank. “Deposit 100,000 yuan today and win the chance to drive a new car home,” blares the announcement. The bank is fighting to attract customers because it knows all too well what it is like to lose them.
goo.gl/hClzY9

Frontier Markets

BSE board approves IPO; BSE plans to file its offer document with Sebi by July, say sources
Shrimi Choudhary – Business Standard
The board of directors of BSE Ltd formally approved its plan to go public at their meeting held in Mumbai. UK Sinha, chairman, Sebi too attended the board meeting as a special guest. The Sebi chief was apprised by BSE on its listing plan.
goo.gl/nNgq4O

Why National Stock Exchange chooses to self-list, not cross-list; Knowing these terms is essential now that NSE may be willing to cross-list if disclosures are sent to Sebi
Ashley Coutinho – Business Standard
Market regulator Securities and Exchange Board of India (Sebi) has told the National Stock Exchange of India (NSE) that the present regulations do not provide for self-listing of a stock exchange. NSE has been lobbying hard for self-listing for some time now. We take a look at some terms associated with the listing of exchanges and why NSE has been reluctant to cross-list its shares:
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Zimbabwe to print ‘bond notes’in a bid to tackle cash shortage; Scarcity of US dollars leads to ATMs running out of money, triggering long queues at banks
by: By Andrew England in Johannesburg – FT
Seven years after ditching its currency as hyperinflation gripped the country, Zimbabwe plans to print “bond notes”, in effect new currency notes, to tackle a deepening cash shortage.
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Miscellaneous

Is losing the City of London really a price worth paying for Brexit?
JEREMY WARNER – Telegraph
Without wishing to be rude, is this the best Vote Leave can muster? I’m not talking about the wider Brexit debate, but the specific issue of the future of Britain’s biggest industry – finance.
goo.gl/nJEsUa

EY Announces TopstepTrader LLC® CEO Michael Patak as an EY Entrepreneur Of The Year® 2016 Finalist in the Midwest
12 NewsNow
EY announced that CEO Michael Patak of TopstepTrader LLC is a finalist for the EY Entrepreneur Of The Year® 2016 Award in the Midwest, which encompasses Illinois and Wisconsin. The awards program, which is celebrating its 30th year, recognizes entrepreneurs who demonstrate excellence and extraordinary success in such areas as innovation, financial performance, and personal commitment to their businesses and communities. Patak was selected as a finalist by a panel of independent judges. Award winners will be announced at a black-tie celebration on June 15, 2016 at the Navy Pier Grand Ballroom in Chicago.
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