First Read

AFX Bell Ringing

The American Financial Exchange went live at 8:30 am on Friday at a special bell ringing ceremony at the Chicago Board Options Exchange

The market, created by Dr. Richard Sandor and operated by the CBOE, is designed to allow small and midsized banks to lend and borrow short-term funds. Six banks have already signed up to participate.

JLN interviewed Dr. Sandor back in September and he spoke about the AFX in a video, which you can see here: http://johnlothiannews.com/2015/09/smalls-and-mediums-richard-sandor-looks-to-transform-the-small-and-mid-tier-bank-sector-part-2/#.VmsqueLePgk

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New Captain: SGX’s Boon Chye Navigates Tough Asian Markets
Jim Kharouf – JLN

Loh Boon Chye took the reins as CEO of Singapore Exchanges (SGX) in July. A former SGX board member and Bank of America Merrill Lynch’s deputy president and head of global markets in Asia Pacific, he said there is much opportunity for the exchange to grow, and perhaps even benefit from the competition that has moved in around him from ICE and others. Boon Chye spoke at SGX’s headquarters with JLN Editor-in-Chief Jim Kharouf about his management style, the game plan for the exchange going forward and just where SGX fits in the global market landscape.

Q: You took the CEO position in July at SGX. How did you go about setting your priorities as a CEO and for SGX?

A: My philosophy is, you have to listen first, then you have to engage, observe, take feedback. I know some CEOs like to come out with a grand plan after 90 days, but frankly with any new CEO in any organization, how much can you know in 90 days? No doubt I had the benefit of being on the board, but that is different than being in management. So I took the time to listen, engage and interact, not just internally but externally with stakeholders.

Read the rest of Kharouf’s interview with Loh Boon Chye at JohnLothianNews.com

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A Tale of Two Responses
John Lothian – JLN
My commentary about the NFA CTA/CPO election on Friday elicited different responses from the candidates I did not endorse; John Roe and James Koutoulas. Roe sent a respectful note, asked for a public clarification of some points and the opportunity to respond in this newsletter. Koutoulas took a different tack and decided to threaten me with a lawsuit for libel if I did not retract my commentary.
bit.ly/1O4HZwn

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Vote Doug Bry and Ernest Jaffarian for NFA Board, CTA/CPO Category
John Lothian – John Lothian News
Doug Bry and Ernest Jaffarian deserve the votes of NFA member Commodity Trading Advisors and Commodity Pool Operators in the upcoming contested election for the Board of Directors of the National Futures Association. They have worked hard on behalf of CTAs and CPOs and have made a positive impact on the board. They deserve to be re-elected.
bit.ly/1IJKKkf

***** Ballots should arrive this week. As we say in Chicago, vote early and vote often.

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Daily Fantasy Sites Back in Business in N.Y. After Appeal
Chris Dolmetsch and Eben Novy-Williams – Bloomberg
DraftKings Inc. and FanDuel Inc. can continue doing business in New York for now, after an appeals court halted a trial judge’s order to temporarily halt daily fantasy games in the state.
An appeals judge on Friday granted the companies a reprieve until an appellate panel has a chance to rule on a request to block the temporary ban while the companies challenge it.
bloom.bg/1mjAFAx

***JB: If you haven’t seen it yet John Oliver has a good riff on whether this is gambling or not. Indeed he may have been at least a part of the impetus for New York to do this.

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China Should Follow the Futures Markets Blueprint
Leo Melamed, OpenMarkets
Will the recent stock market volatility cause China to disregard this global experience and blueprint? Will it inhibit index markets’ continued growth? Or will it instead follow the dictum of President Xi Jinping when he stated, “Let the market play a decisive role,” and, by extension, adopt a path to keep its financial futures market viable and strong? I trust China will follow the advice of its President.
bit.ly/1OnNxfI

***** You remember the advertising campaign “Bo Knows?” There should be one called “Leo knows.”

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High-Grade Turnover: A Closer Look at That All-Time Low
David Krein – MarketAxess Research Blog
US high grade turnover is at an all-time low. That’s what the headlines tell us, and Fig. 1 (below and on our Market Insights page) certainly supports the story. But a closer look shows that while, on average, market turnover is down, turnover for the most actively traded bonds remains well within the historical range.
bit.ly/1meSbGh

***DA: As always, Krein cuts through the headline to give the real story. Maybe it’s not such a dire situation.

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Twitter warns over potential state-sponsored hack
Leslie Hook – Financial Times
Twitter has issued its first ever warning about a possible hack by state-sponsored actors, as the social media site steps up its scrutiny of possible security breaches. The alert highlights growing concern over hacking activity backed by foreign governments after a year in which high-profile cyber attacks included the breach of 22m personnel profiles at the US Department of Homeland Security.
on.ft.com/1UnZAhH

***** There are two kinds of people. Those that know that they have been hacked, and those that have been hacked.

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Alun Green, SunGard – The Technology Roadmap, 2015 Edition
MarketsWikiEducation.com

“We as human beings have not evolved to be very good at reading and writing.”

Alun Green asks, “is the written word dying?” Perhaps dying is too strong a word, but Green makes an excellent point in that humans have walked the planet for millions of years, and only began using the written word within the past few hundred years – much too short a time span to have “evolved” to cope with the written word. Meanwhile, as technology continues to disrupt any and all human processes, our species may well revert back to the forms of oral and visual communication to which we are better suited.

As a career technologist facilitating the automation of manual processes, Green asks what human beings will do when the computers and robots take over. His answer? Machine learning is not the same as artificial intelligence, and we sentient beings will be needed for decision making and communication, but not necessarily the written kind.

Watch the video »
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Butter Meltdown as U.S. Spot Price Plummets Most in 11 Years
Jeff Wilson – Bloomberg
Production rose after market surged to record in September
Dec. 10 becomes a bearish landmark as price tumbles 18%
A gauge of U.S. butter prices plunged the most in 11 years after production and inventories increased following a bull run to a record in September.
bloom.bg/1Z7B0V7

**** Any more trading in Butter?

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Bridging the Week by Gary DeWaal: December 7 – 11 and 14, 2015; Investment Companies and Derivatives; Attempted Manipulation; HFTs; Conviction Overturned)
By Gary DeWaal, Katten, Muchin Rosenman LLP
The Securities and Exchange Commission proposed a rule that, if adopted, would restrict registered investment funds from transacting in derivatives. In France, one algorithmic trader and an exchange were sanctioned for certain high-speed trading activities; while in Canada, high-speed trading was initially praised by a regulator. However, later on the same day, the praise was retracted, but certain beneficial impacts on markets by high-speed trading continued to be itemized.
bit.ly/1m0MCL5

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Lead Stories

Regulators to Wall Street Banks: Rescue Yourselves Next Time
Jesse Hamilton – Bloomberg
OCC wants recovery maps from firms above $50 billion in assets
Agency head says proposal to lay out enforceable guidelines
After Wall Street has spent years trying to convincing regulators how they could collapse without disrupting the financial system, the largest U.S. banks will soon have to take the additional step of showing how they can keep from failing in the first place.
bloom.bg/1SWPrb1

Climate Agreement’s Success Hinges on Countries Making Painful Decisions
By GABRIELE STEINHAUSER, MATTHEW DALTON and BILL SPINDLE – WSJ
Supporters hope the deal will unleash an avalanche of investment in renewable energy, new technologies
PARIS—The landmark climate agreement that more than 190 countries struck over the weekend ushers in a broad, new international effort to wind down the fossil-fuel era.
on.wsj.com/1Ns9Pgm

Junk-Bond Fund’s Demise Highlights SEC Mutual-Fund Worries
Andrew Ackerman – WSJ
The demise of a Third Avenue Management LLC junk-bond fund last week underscores financial regulators’ concerns about risks in mutual funds and highlights Washington’s urgency in trying to address those worries.
on.wsj.com/1P0Dv6Y

Citic Short-Selling Offer to Funds Led Police to Its Door
Bloomberg News
Investigation First Focused on Shorting Method for Foreigners
“Looks from the outside like an unfair and arbitrary search”
The fall from grace for China’s biggest brokerage and investment bank, Citic Securities Co., has been fast and steep. The firm — sometimes referred to as the Goldman Sachs of China — began the year on its way to eclipsing UBS Group AG in the ranks of the top four securities firms in the world.
bloom.bg/1jY67CM

The China metal exchange at center of investment scandal
BY DAVID STANWAY – Reuters
The plain four-storey Fanya exchange building in this southern Chinese city is teeming with investigators trying to understand how an obscure metal trading business turned into one of China’s most audacious investment schemes.
reut.rs/1Qh7LOv

Why the coming US interest rate hike is like none ever witnessed before; Central bank watchers believe the Federal Reserve is finally ready to pull the trigger on an interest rate hike
By Peter Spence, Economics Correspondent – Telegraph
It is hard to overstate the significance of the decision that Janet Yellen, the US Federal Reserve chairman, and the rest of the Federal Open Market Committee (FOMC) will take later this week.
bit.ly/1NkYot0

Inside the commodity trader Vitol that pulls the levers of the global economy
Ben Marlow – The Telegraph
It did not take much to convince Ian Taylor to enter the cut and thrust of Shell’s oil trading floor. As a cash-strapped graduate fresh out of Oxford, one of the biggest decisions of his life was swayed by something very basic – the promise of a few extra quid.
bit.ly/1J4FGlt

Thousands more bank jobs under threat
Laura Noonan and Martin Arnold – Financial Times
Big banks in Europe and the US announced almost 100,000 new job cuts this year, and thousands more are expected from BNP Paribas and Barclays early next year, as the wave of lay-offs that began in 2007 shows no sign of abating. The 2015 cuts — which exclude the impact of major asset sales — amount to more than 10 per cent of the total workforce across the 11 large European and US banks that announced fresh lay-offs, according to analysis by the Financial Times.
on.ft.com/1Uo1mQ7

Europe considers US-style derivatives clearing system
Financial Times
European regulators are formally considering introducing a US-style clearing regime to end a long-standing dispute between US counterparts to harmonise derivatives regulation and prevent the global market from fragmenting.
on.ft.com/1UoaunO

EU extends capital grace period for banks using U.S. clearers
BY HUW JONES – Reuters
The European Union’s executive body has postponed for the fourth time imposing tougher capital requirements on banks from the EU that pass derivatives through non-EU clearing houses.
reut.rs/1jYcG8h

EU to allow US-style derivatives option to secure transatlantic deal
Huw Jones – Reuters via Yahoo Finance
European Union regulators have proposed U.S (Other OTC: UBGXF – news) .-style flexibility in how rules making derivatives safer are applied in a bid to reach a long-delayed transatlantic deal on supervising the $552 trillion sector. The 28-country bloc and the United States are locked in negotiations over recognising each other’s rules for trading derivatives such as interest rate swaps.
yhoo.it/1Uo8ig4

In praise of post-financial crisis paranoia
Rupert Harrison – Financial Times
It is tempting to declare that the crisis is over. The Bank of England reckons “the financial system has moved out of the post-crisis period” — and for some commentators the Autumn Statement delivered last month by George Osborne, chancellor, marked the end of austerity. Real wages are, finally, rising at a healthy clip. On a list of voters’ main concerns, the economy has dropped almost out of sight.
on.ft.com/1UnZZRr

Lehman Brothers dead, but trader keeps fight alive for $83 million bonus
Renae Merle – Chicago Tribune
Before Lehman Brothers collapsed, pulling the trigger on the global financial crisis, a little-known bond trader was on a hot streak. Over two years, Jonathan Hoffman had brought the megabank more than $700 million in profits.
Just 35 years old, Hoffman was looking forward to an $83 million bonus. It was an eye-popping payday, even by Wall Street standards and a reflection of Hoffman’s reputation as a talented trader.
trib.in/1Uo0Bqa

Big Oil, Make Way for Big Solar. The Winners and Losers in Paris
Matthew Campbell – Bloomberg
Ambitious climate pact means long-term economic transformation
If you don’t adapt, `your livelihood is going to be destroyed’
Saving the world isn’t going to be cheap. If you sell oil, coal or old-fashioned cars, that threatens disaster. For makers of stuff like solar panels, high-tech home insulation, and efficient lighting, it’s a potential miracle.
bloom.bg/1Uo9vUI

Crude drops below $35 as gloom hangs over oil market; Oil prices nearing the lows of the economic crisis
By JENNY W. HSU – WSAJ
Crude prices slumped below $35 a barrel for the first time since February 2009 on Monday, extending losses from last week when industry watchdog International Energy Agency warned global crude demand will decelerate next year.
on.mktw.net/1RMZ65o

Misbehaving Markets Seen No Barrier This Time to Unstoppable Fed
Jonathan Burgos – Bloomberg
Once again, the Federal Reserve is about to make a historic interest-rate decision against a backdrop of rising equity volatility, tumbling commodity prices and jitters in credit markets. This time, investors expect policy makers to pull the trigger.
bloom.bg/1O4Hxy5

What the Paris climate deal means for oil markets
By SARA SJOLIN – MarketWatch
As if it couldn’t get any worse for oil companies, the historic climate-change deal agreed in Paris is seen as another nail in the coffin for future demand for fossil fuels, Morgan Stanley analysts said in a note.
on.mktw.net/1I3OFIJ

When do markets close for Christmas?
By ELLIE ISMAILIDOU – MarketWatch
Many investors are waiting for their Santa rally — and for Santa.
on.mktw.net/1P2S5L8

Scaled-Back Bank Safety Rule Sets Up Regulator Clash With Sen. Warren; Banks lobbied to water down requirement of cash cushion against risk of some trades
By ANDREW ACKERMAN – WSJ
U.S. regulators are set to hand large banks a significant victory next week, following the industry’s request to water down a rule requiring firms to set aside cash as a cushion against the risk of certain trades going bad, according to people familiar with the matter.
on.wsj.com/1P0DnnU

TMX policy self-defeating says Aequitas; Aequitas maintain that TMX employs an anti-competitive policy on market data.
By Paul Walsh – The Trade News
TMX’s “monopolistic” data policy could be detrimental to its own business model according to the president and CEO of rival exchange Aequitas.
bit.ly/1jYc5nd

Regulatory

SEC Proposes New Derivatives Rules for Registered Funds and Business Development Companies
SEC
he Securities and Exchange Commission today voted to propose a new rule designed to enhance the regulation of the use of derivatives by registered investment companies, including mutual funds, exchange-traded funds (ETFs) and closed-end funds, as well as business development companies. The proposed rule would limit funds’ use of derivatives and require them to put risk management measures in place which would result in better investor protections.
1.usa.gov/1UookXd

Bond Rout Stokes Debate Over Regulation-Driven Liquidity Drought
Ryan Tracy – WSJ
The volatility in junk bond markets spreading across the financial system intensifies a debate already raging between Wall Street and Washington: have post-financial crisis restrictions actually made markets less safe, by curbing the ability of banks to help absorb shocks?
on.wsj.com/1I1CfRy

Scaled-Back Bank Safety Rule Sets Up Regulator Clash With Sen. Warren
WSJ
U.S. regulators are set to hand large banks a significant victory next week, following the industry’s request to water down a rule requiring firms to set aside cash as a cushion against the risk of certain trades going bad, according to people familiar with the matter.
on.wsj.com/1P0DnnU

FCA calls for views on social investments
UK FCA
The Financial Conduct Authority (FCA) is calling for contributions on how regulation is working in relation to the social investment market.
bit.ly/1O4MmYb

Texas Attorney General Must Face Securities-Fraud Charges
Bloomberg
Texas Attorney General Ken Paxton must face charges he broke state securities laws by soliciting investors for a friend’s technology company without revealing he was being compensated for it.
A state judge on Friday allowed the case to proceed after deciding prosecutors and the judge originally in charge of Paxton’s case correctly applied state laws and followed proper procedures.
bloom.bg/1mjBaKT

EU gains breathing room with new deadline delay for US clearinghouse rules
MLex
The EU has today postponed a deadline looming next week for a deal with the US on regulating derivatives clearinghouses, gaining breathing room for talks to bridge a trans-Atlantic split over post-crisis market safeguards.
bit.ly/1TJEPwa

Counting the cost of EU regulation for commodity firms
Hellenic Shipping News Worldwide
European officials may back a one-year delay to January 2018 for introducing landmark reform of EU financial markets. The European Commission said a delay is needed as regulators are not ready for an original January 2017 start for the Markets in Financial Instruments Directive (MiFID II). MiFID II will significantly increase reporting requirements for banks and brokers but final rules have yet to be published, meaning time is too short to get computer systems ready.
But some of the challenges MiFID II poses for commodity firms and banks will still exist in 2018.
bit.ly/1Uo3HdP

Irish regulator launches fund fee probe
Attracta Mooney – Financial Times
The largest ever investigation in Europe into the fees asset managers charge investors will begin next year amid widespread accusations of overcharging within the fund management industry. The financial watchdog in Ireland, which oversees more than 6,000 funds, including 3,725 mutual funds, is to examine whether the investment products offer “value for money”.
on.ft.com/1mjBCsz

ASIC welcomes release of IOSCO custody principles
ASIC
ASIC has welcomed the recent release of the International Organization of Securities Commissions’ (IOSCO) Custody Standards as further recognition of the importance of strong custodial arrangements. Their release follows the strengthening of domestic requirements for custodians in Australia in recent years.
bit.ly/1O4Goqo

SIFMA Supports Increased Bond Market Price Transparency for Investors; Urges Uniform Disclosure Requirements
SIFMA
SIFMA, in a comment letter filed today with the Financial Industry Regulatory Authority (FINRA) and the Municipal Securities Rulemaking Board (MSRB) on their revised proposals for retail confirmation disclosure of reference prices on certain fixed income securities, expressed its strong support for efforts to enhance bond market price transparency in a way that provides retail investors with useful, clear, and consistent insight into their transactions. SIFMA also notes its concern that the proposed approach lacks coordination and that any new confirmation disclosure requirement should be uniform in design and operation, as there is no policy justification for adopting divergent approaches or terminology between regulators in this context, and urges FINRA and the MSRB to embrace a uniform or harmonized approach to potential rulemaking.
bit.ly/1lI1IFN

SDR Indemnification Removal: A Good Step Forward
ISDA
An important yet largely unnoticed step in efforts to improve regulatory transparency came to pass last week. A bill to remove a provision within the Dodd-Frank Act that essentially compelled foreign regulators to indemnify US swap data repositories (SDRs) against litigation related to information provided by those SDRs became law.
jlne.ws/pZFQ0O

Exchanges & Trading Facilities

INTERCONTINENTAL EXCHANGE COMPLETES ACQUISITION OF TRAYPORT
ICE
Intercontinental Exchange (NYSE: ICE), the leading global network of exchanges and clearing houses, today announced it has completed its acquisition of Trayport from BGC Partners and GFI for approximately $650 million, comprising approximately 2.5 million ICE common shares. The transaction was announced on November 16, 2015, and will help ICE provide new services to the European over-the-counter (OTC) energy markets.
bit.ly/1jY7cuc

IEX wants buyside in its corner for ‘David vs Goliath fight’
Financial News
IEX sent a note – seen by Financial News – to its buyside users on December 10 in which it encouraged them to write to the US Securities and Exchange Commission in support of its exchange application.
bit.ly/1mjBlpC

Exchange Council approves introduction of further energy turnaround products
EEX
Wind Power Futures in the pipeline – Further short-term maturities on the Power Derivatives Market – Discussion of price zones and financial market regulation
bit.ly/1YeBA0V

SGX named ‘Global Exchange of the Year’, Companies & Markets
Melissa Tan – The Business Times
THE Singapore Exchange’s (SGX’s) recent derivatives expansion has brought it an international accolade. The bourse has been named “Global Exchange of the Year” for the first time by derivatives magazine Futures & Options World, it said in a press release on Monday.
bit.ly/1Uo6KCG

Eurex Trading-on-Behalf service for mass deletion: Amended validation process for users of the PIN procedure
Eurex
In the event that the Participant Front End System or another EDP system of an Exchange Participant is non-functional, the entry of data into the Electronic Trading System may be processed as part of the Trading-on-Behalf service. In this case, the Eurex Exchanges will verify the legitimation for data entry based on the active user ID notified to them.
bit.ly/1J6LhYs

Hong Kong exchange launches second round of mini metals contracts
Reuters
The Hong Kong bourse launched its second round of mini metals futures contracts on Monday as it seeks to build up interest from Chinese retail buyers on the back of its metals franchise.
reut.rs/1YeSoF0

Hedge Funds & Managed Futures

Man Group to name former trade minister as chairman; Lord Livingston may join before Christmas
Anna Fedorova – InvestmentWeek
The alternative investments managers confirmed it is in advanced talks with Lord Livingston (pictured), who was also previously the chief executive of BT Group, over his new position at the firm, which is now awaiting regulatory approval.
bit.ly/1Qo460Y

Junk Bonds Stagger as Funds Flee; After junk-bond prices posted their largest drop since 2011 on Friday, investors are bracing for a difficult week
By MATT WIRZ, MIKE CHERNEY and CORRIE DRIEBUSCH – WSJ
Traders and regulators have fretted for more than a year that mayhem might ensue if U.S. mutual funds sought to sell rarely traded bond investments.
on.wsj.com/1P1XwMa

This commodity trader made heaps of money from the oil price crash — now it’s paying staff £500 million in bonuses
Will Martin – Business Insider
Trafigura, one of the world’s largest commodity trading houses, made so much money off the oil price crash, it is going to pay staff more than half a billion dollars in bonuses.
read.bi/1m0ITgx

The Charlie Brown of High Yield
By Lisa Abramowicz – Bloomberg Gadfly
Mutual funds that own hard-to-trade debt are gunning for an advantage when it comes to returns, but they can face a big disadvantage when it comes time to sell.
bloom.bg/1P26QQh

Hedge fund LionEye to shut after losses, redemptions: sources
BY SVEA HERBST-BAYLISS – Reuters
LionEye Capital, a $1.5 billion event-driven hedge fund, is closing its doors at the end of December after suffering double digit losses and heavy redemptions this year, two people familiar with the matter said.
reut.rs/1Y9XQhW

Robo Advisers Seen Exploding in Popularity; Term expanding from just all-digital services to cover hybrid offerings with a human touch
By ANNE TERGESEN – WSJ
A study released this week predicts “robo” financial-advice services will manage an eye-popping $5 trillion to $7 trillion within a decade, up from under $100 billion today.
on.wsj.com/1lI4Xgv

Banks & Brokers

Goldman’s Blankfein Eyes Full-Time Role After Treatment; CEO has maintained steady presence within firm’s Manhattan headquarters since disclosing illness
By JUSTIN BAER – WSJ
Goldman Sachs Group Inc. Chief Executive Lloyd Blankfein, who was diagnosed in September with a curable form of lymphoma, is making tentative plans to resume his full work schedule at the Wall Street firm in early 2016, people familiar with the matter said.
on.wsj.com/1McHaKk

Citibank and HSBS are struggling to meet new regulations on banks based outside of the European Economic Area
by Billy Bambrough – City AM
High street banks in the UK that are based outside of the European Economic Area are rushing to comply with new regulations that could leave senior bankers based abroad to be held accountable for failings in branches.
bit.ly/1McJpgB

The ‘Honest Broker’ Strikes Again
By Gillian Tan – Bloomberg
Michael Klein should enjoy his moment in the sun.The former Citigroup investment banker’s firm, Klein & Co., is listed first among financial advisers to Dow on its merger with DuPont, ahead of Lazard and Morgan Stanley. The trio are set to share fees of between $80 million and $100 million, according to estimates from consulting firm Freeman & Co., which expects DuPont’s advisers Evercore and Goldman to split a separate, similarly-sized fee pool.
bloom.bg/1IPMKHN

J.P. Morgan Misses Out on Goldman’s Chemical-Induced High
By DANA CIMILLUCA – WSJ
Whenever a big deal lands on Wall Street, some bankers cheers while others wince. With Dow Chemical Co.’s landmark agreement Friday to combine with DuPont Co.DD -5.83% — likely to be the last big deal in a year full of them — those cries of joy and pain are even louder.
on.wsj.com/1SWTmEC

FXCM Releases Statement on Ongoing Discussions With Leucadia and Stock Repurchase Program
By GlobeNewswire
FXCM Inc. / FXCM Releases Statement on Ongoing Discussions With Leucadia and Stock Repurchase Program . Processed and transmitted by NASDAQ OMX Corporate Solutions. The issuer is solely responsible for the content of this announcement.
bit.ly/1I3WT3B

Clearing & Settlement

ASIC implements clearing regime in Australia for OTC derivatives
ASIC
ASIC has today released rules implementing Australia’s mandatory central clearing regime for over-the-counter (OTC) derivatives of financial institutions – the ASIC Derivative Transaction Rules (Clearing) 2015 (derivative transaction rules (clearing)) and explanatory statement.
bit.ly/1NP9LLg

Clearstream’s November 2015 figures
Clearstream
Assets under custody up 9 percent compared to November 2014; Investment fund transactions increased by 12 percent
Business stream 1: Custody; In November 2015, the overall value of assets under custody held on behalf of customers registered an increase of 8 percent to EUR 13.4 trillion (compared to EUR 12.4 trillion in November 2014).
bit.ly/1P2NxEF

Finextra: Finextra PR: Asic releases rules governing central clearing in OTC derivatives
Finextra
ASIC has today released rules implementing Australia’s mandatory central clearing regime for over-the-counter (OTC) derivatives of financial institutions – the ASIC Derivative Transaction Rules (Clearing) 2015 (derivative transaction rules (clearing)) and explanatory statement.
bit.ly/1Uo35F0

DTCC’s Omgeo partners with SimCorp
Automated Trader
The Depository Trust & Clearing Corporation’s Omgeo subsidiary and SimCorp, the provider of investment management solutions and services, have announced that the first live repurchase agreement (repo) trade has been automatically processed in SimCorp Dimension and Omgeo Central Trade Manager (Omgeo CTM) between Kammarkollegiet and Nordea Bank. This marks a significant milestone in DTCC’s ongoing partnership with SimCorp to deliver straight-through processing (STP) to the marketplace.
bit.ly/1Uo2zqB

Indexes & Products

Leveraged ETFs Face SEC Squeeze in Plan to Rein in Derivatives
David Michaels – Bloomberg
Regulator’s proposal would cap fund leverage at 150% of assets
Chair White says she’s concerned current rules now outdated
U.S. regulators have declared war on the $32 billion leveraged ETF industry.
bloom.bg/1YeNMPn

Technology

BITCOINS TOO CAN DISAPPEAR. PHOTOGRAPHER: TOMOHIRO
By Leonid Bershidsky -Bloomberg
It’s probably impossible to determine with 100 percent accuracy the identity of “Satoshi Nakamoto,” the pseudonymous creator of bitcoin. News reports of investigations into his identity didn’t quite go that far in linking Australian Craig Wright to Nakamoto. Yet media efforts to identify Nakamoto highlight two major problems with the bitcoin market: It’s too easily manipulated and too vulnerable to the nation-states it was meant to transcend.
bv.ms/1NPfgJT

Bitcoin’s central banker is yesterday’s man
Stephen Foley – FT
Cryptocurrencies have moved on — whether or not Satoshi has been found, writes Stephen Foley
on.ft.com/1O4KgaN

Enforcement

SEC: Sports Team Offering Is A Penny Stock Fraud
SEC.gov
The SEC alleges that Thomas Anthony Guerriero as CEO of Oxford City Football Club Inc. used pressure tactics and a boiler room of salespeople to raise more than $6.5 million from primarily inexperienced investors who were misled to believe that the company was a thriving conglomerate of sports teams, academic institutions, and real estate holdings. But in reality the company was losing millions of dollars each year and turning zero profit from its two lower-division soccer teams in the U.K.
1.usa.gov/1jVxNrQ

Ex-Optimal fund manager acquitted in Madoff trial
Paul McClean in Geneva – FT
A former fund manager who lost EUR2.3bn of client money in Bernard Madoff’s Ponzi scheme has been acquitted of a charge of mismanagement by a court in Geneva.
on.ft.com/1RN74vj

Environmental & Energy

Let’s hail the Paris agreement and get to work
Financial Times
The Paris agreement and the supporting decisions are a diplomatic triumph. They are an act of true global co-operation of historic significance. Yet it is crucial to distinguish between diplomacy and implementation. The diplomats have done their job: the Paris agreement points the world in the right direction with sophistication and clarity. It does not, however, ensure implementation, which remains the domain of politicians, businessmen, scientists, engineers and civil society.
on.ft.com/1Uo5Bek

Landmark Climate-Change Agreement Hailed as ‘Leap for Mankind’
Alex Morales and Ewa Krukowska – Bloomberg
The world’s nations took the boldest steps yet to stem climate change, adopting an historic package of measures to limit fossil-fuel pollution and establish a mechanism to step up the reductions for decades.
After two weeks of intense negotiations overseen by the United Nations, envoys from 195 nations in Paris on Saturday endorsed a program that also set an ambitious goal to curb temperature increases and set up ways to measure and verify emissions everywhere.
bloom.bg/1mjBd9I

Business Supports Climate Deal With Varying Degrees of Enthusiasm
Emese Bartha and Cassandra Sweet – WSJ
Many global corporate headquarters rushed to publicly embrace the climate deal struck in Paris over the weekend, despite lingering worry that the lack of specificity about the real costs to businesses could threaten competitiveness.
on.wsj.com/1UnYDWH

Climate obstacles emerge within hours
Pilita Clark and Demetri Sevastopulo – Financial Times
The obstacles facing this weekend’s historic global climate change accord were thrown into relief on Sunday night when businesses and government officials downplayed the impact of the deal and US Republicans underlined their opposition.
on.ft.com/1UnZ834

For big business seeking CO2 emissions price, a ray of hope from Paris
Nina Chestney and Barbara Lewis – Yahoo Finance
For the most part, big business wanted one thing from the climate accord in Paris on Saturday: a price on carbon dioxide (CO2) emissions. While on the surface their hopes were dashed, looking deeper may give them cause for hope.
yhoo.it/1miNTxD

Climate expert calls for decarbonisation tech to help meet Paris targets; Hans Joachim Schellnhuber pushes for afforestation and advances to carbon capture and storage projects to limit global warming
Suzanne Goldenberg – The Guardian
Holding temperature rise to 2C – let alone hitting the aspirational target of 1.5C in the climate agreement concluded in Paris at the weekend – is going to require the deployment of technologies to suck carbon out of the atmosphere, the pope’s climate change adviser said.
bit.ly/1P2PTTS

Asia-Pacific

China Disappearances Highlight Ruling Party Detention System
Bloomberg News
Chairman of Fosun International became `Unreachable’ Thursday
Shuanggui system of secret detentions a key part of crackdown
The baffling disappearance of Chinese executives in recent weeks has drawn attention to the ruling Communist Party’s practice of holding people incommunicado either as targets of investigations themselves or to help with probes of others.
bloom.bg/1QoagOJ

Chinese officials admit to faking economic data
DAVID SCUTT – Business Insider
Even a time of heightened uncertainty, there’s one thing a majority of markets agree upon: Chinese data is unreliable, particularly figures released by regional governments.
bit.ly/1J6HJ8r

Online broker chases Japan’s day traders to close gap with peers
BY TAKAKO TANIGUCHI, FINBARR FLYNN AND KYOKO SHIMODOI – Bloomberg via Japan Times
Monex Group Inc. is seeking more business from Japan’s growing ranks of day traders in a bid to catch up with other online brokerages.
bit.ly/1Z7yVIL

Frontier Markets

Once hot, India bond markets turn vulnerable ahead of Fed decision
By Reuters via Economic Times
Indian traders fear that an interest rate rise from the US Federal Reserve this week could cause a destabilising spike in bond yields, and are calling on the Reserve Bank of India (RBI) to intervene by buying bonds via open market operations (OMO).
bit.ly/1J6FEtn

India Plans to Release Millions of Tons of Sugar Onto International Markets
Vibhuti Agarwal – WSJ
India is planning to dump a mountain of sugar on the world, and traders say the controversial move could knock the wind out of a global sugar market that is already grappling with a glut.
on.wsj.com/1NqoKHX

BSE in pact for India’s first bullion exchange; BSE to hold 30% stake in return for technology and platform, IBJA and individual jewellers the rest
BS Reporter
India Bullion and Jewellers Association (Ibja) has signed an agreement with the BSE for setting up a bullion exchange, the first of its kind in India.
bit.ly/1RjYhlt

Miscellaneous

Sen. Bob Corker Failed to Properly Disclose Millions of Dollars in Income; Tennessee Republican files amendments to reports going back to 2007; ‘I am extremely disappointed in the filing errors’
By BRODY MULLINS – WSJ
Sen. Bob Corker failed to properly disclose millions of dollars in income from real estate, hedge funds and other investments since entering the Senate in 2007, according to new financial reports filed by the Tennessee Republican.
on.wsj.com/221vfdX

Pearson woes deepen over UK ebook price row; Universities are outraged by steep price increases as pressure on the textbook giant grows, the Telegraph has learned
By Christopher Williams, Technology, Media and Telecoms Editor – Telegraph
The beleaguered education giant Pearson faces a crisis in its British universities business after it imposed steep price rises on academic libraries.
bit.ly/1RN4iWZ

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