John Lothian: Regulators Want to Slow Runs on Derivatives; Lehman Brothers lives on; Hedge Fudge Managers Lose Their Swagger; In six months, investors have withdrawn $16 billion.

May 5, 2016

First Read

East meets West – Chinese brokers continue international expansion
Alex Godingen, Head of Business Development, APAC, Fidessa

The world watched last year as Chinese markets plunged. Speculation ran rife as the West argued whether this was a correction, an evolution or the beginning of the end.

Meanwhile, in China, securities and futures firms remained largely unruffled. State-owned, and backed by over US$3 trillion in foreign exchange reserves, these institutions have been looking outward for a long time. The domestic market, large as it is, is not big enough for the number of brokers (over 100 securities and over 200 futures) saturating it. The government has started a domestic M&A process, but overseas expansion is needed as well to create a market – and firms – that can stand toe-to-toe with their foreign counterparts.

The market is also pushing them abroad. China’s outbound foreign direct investment (ODI) continues to grow – from US$12 billion in 2005 to more than US$118 billion in 2015 – as it consolidates its position as the world’s second largest economy (GDP US$11 trillion in 2015). Chinese retail investors, who make up a stunning 80% of the market, are hungry for overseas investments to help manage their risk. They want big, global firms to help them manage their wealth around the world, but that are based in China.

This retail focus poses problems.

Read the rest of Godingen’s commentary at JohnLothianNews.com

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The ‘Missing Link’ in Today’s Interest Rate Derivatives Markets
David Bullen, Bullen Management Ltd and Gavin Dixon via TABB Forum
Reduced market liquidity and structural market changes are driving up the cost of accessing traditional interest rate products for end users, pushing them to find alternatives. The evolving sub-asset class of IR swap futures sits neatly between the precision and flexibility of over-the-counter products and the liquidity and transparency of exchange-traded derivatives.
goo.gl/5esrws

***** This is the featured story on TABB Forum.

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Nasdaq CEO Bob Greifeld: Slow and Steady
WatersTechnology
Bob Greifeld works in an industry where fractions of a second matter. Still, that hasn’t stopped the longtime CEO of Nasdaq from taking a workman-like approach to his job. Dan DeFrancesco talks to Greifeld about his journey to Nasdaq, and what he’s learned along the way. Photos by Timothy Fadek
jlne.ws/1WKK1n6

***** This has Allan Schoenberg’s fingerprints and Starbucks coffee stains all over it.

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Janus’ Bill Gross sells part of famed stamp collection
Reuters
Billionaire bond manager Bill Gross has sold part of his famed stamp collection for $4.5 million and will donate some of the proceeds to a philanthropic arm of his former employer, Pacific Investment Management Co, which he is now suing.
/goo.gl/N1kGA3

***** Ted Turner once did a deal to sell some radio stations. Asked if this meant he was having financial problems, he said no, this was just a business deal. When I start to sell sailboats, then you know I have financial problems. My wife keeps telling me to sell my sailboat and every time I think about it, this story comes to mind.

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The Right Stuff: Divento Academy Looks to Train the Next Generation of Traders
Jim Kharouf, JLN
In the height of the 2008-09 financial crisis, many in the financial industry wondered where the next generation of traders would come from. Amid the meltdown of Lehman Brothers, the Libor scandal and other high-profile enforcement actions, and a massive downsizing of bank trading desks, there has been real concern that the existing pool of trading talent was being tossed out and the stream of new traders was drying up.
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Wednesday’s Top Three
The top story on Wednesday wasn’t really a story but rather an infographic of first quarter interest rates from ICE, 1st Quarter 2016 Interest Rates. In second place is a story by our own Jim Kharouf, The Right Stuff: Divento Academy Looks to Train the Next Generation of Traders. In a close third is the story, ICE Drops Potential LSE Bid, Saying Executives Shunned Talks

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

Regulators Want to Slow Runs on Derivatives
By Matt Levine – Bloomberg
Nobody quite knows what it means for a bank to be “too big to fail,” so the regulators in charge of solving the problem have an understandable focus on tidiness. A bank that fails tidily, sensibly, in neat little compartments, probably won’t do much damage to anyone else. A bank whose failure is sprawling and incomprehensible might well turn out to be catastrophic.
goo.gl/sEGu2E

Lehman Brothers lives on
Harriet Agnew – FT
“Lehman Brothers is not afraid of risks. The biggest risk sometimes is to take no risk at all.” So said Robert Lehman, who for many decades ran the company that his father had founded in 1850 as a cotton trading operation but grew to become the fourth-largest investment bank on Wall Street.
/goo.gl/YQ61vE

Hedge Fudge Managers Lose Their Swagger; In six months, investors have withdrawn $16 billion.
Katherine Burton – Bloomberg
Doug Dillard followed the path that once almost guaranteed entrance into the 1 Percent: Good college (Georgetown), investment bank (Morgan Stanley), MBA (Harvard). Then a hedge fund. A decade out of business school, he was heading Standard Pacific Capital, a multibillion-dollar San Francisco firm that traded global stocks. It did well by its clients, making money in 2008 as markets plummeted.
goo.gl/0aEpGp

RMA and SIFMA Recommend New York Fed’s Overnight Bank Funding Rate as New Benchmark to Replace the Fed Funds Open Rate
SIFMA
The Risk Management Association (RMA) and the Securities Industry and Financial Markets Association (SIFMA) have announced that each recommends the use of the Federal Reserve Bank of New York’s new Overnight Bank Funding Rate (OBFR) as a benchmark for pricing and performance reporting purposes to replace the Fed Funds Open (FFO) rate.
goo.gl/11ljJ7

US firms agree SEC form for ATS transparency lacks clarity
By Hayley McDowell – The Trade
A TABB Group study into the Securities and Exchange Commission’s (SEC) proposed rules on alternative trading systems (ATS) transparency reveals US firms agree it lacks clarity and consistency.
goo.gl/e5Hj2D

Owner of New York Stock Exchange Will Not Bid for London Rival
By CHAD BRAY – NY Times
Shares of the London Stock Exchange fell sharply on Wednesday after the operator of the New York Stock Exchange said that it had decided against making a counterbid for the London exchange.
goo.gl/uk1yUt

LSE denies ICE’s claims over merger talks; LSE claims ICE did not approach the Group with any proposals of a merger.
By Hayley McDowell – The Trade
The London Stock Exchange Group (LSE) has denied claims from Intercontinental Exchange (ICE) Jeffrey Sprecher that it refused to hold proposed merger talks.
goo.gl/XNYZst

Big three in credit ratings still dominate business
BY SHANKAR RAMAKRISHNAN AND PHILIP SCIPIO – Reuters
US regulators have largely failed to loosen the grip that the big three credit rating agencies have on the bond rating business, even after reforms put in place in the wake of the last financial crisis.
goo.gl/2Rz7YX

Brexit: sovereignty is not the same as power; The very fact that the UK is holding a vote on membership of the EU shows that it is sovereign
Martin Wolf – FT
If Britain were to vote to leave the EU in June would it regain the sovereignty that those in favour of leaving argue it has lost? The answer is no. The very fact that the UK is holding this vote proves that it remains sovereign. The referendum is not about sovereignty. It is about how best to exercise the country’s power.
/goo.gl/scFDO6

A risible case for Brexit based on dubious data; Erecting unnecessary trade barriers would threaten Britain’s relative prosperity
Chris Giles – FT
It is obvious. As the fifth-largest economy in the world, of course Britain would get a good trade deal with the EU and other countries. Such statements are repeated so often by those campaigning for Britain to leave the bloc that they tend to pass with little comment. But as a foundation of the case for Brexit, they could hardly be more risible.
/goo.gl/9tdU3R

Regulatory

European Central Bank scraps EUR500 note; Central bank cites concerns about ‘illicit activities’ as critics allege war on cash
by: Claire Jones in Frankfurt – FT
The European Central Bank has decided to stop producing EUR500 notes, in a move it depicts as a crackdown on crime but which critics in German-speaking countries say is part of an onslaught on cash and savings.
/goo.gl/IAh6dA

Australian regulators follow FCA with launch of regulatory sandbox
By Hayley McDowell -The Trade
The Australian Securities and Investments Commission (ASIC) has proposed the launch of a regulatory sandbox to help FinTech start-ups in the region.
jlne.ws/1WKJJN8

Won’t allow new commex products till liquidity assured: Sebi; Chairman U K Sinha said control of physical market by the state creates obstacles under the essential Commodities Act
Business Standard
Amid challenges from physical commodity markets, Sebi chairman U K Sinha said Thursday the regulator will not bring in new products in the commodities derivative market unless they have enough liquidity.
goo.gl/0tChjh

Sebi says no to futures trading in new commodities; Sebi says it will not allow futures trading in new commodities unless assured of sufficient liquidity
Livemint
Mumbai: India will not allow futures trading in new commodities unless assured of sufficient liquidity, a top official at the markets regulator said on Thursday, three years after a scandal dealt a blow to confidence in the country’s commodities markets.
goo.gl/k7J2Ny

Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed
Rule Change Establishing Fees Relating to End Users and Amending the Definition of
“Affiliate,” as well as Amending the Exchange’s Price List to Reflect the Changes
SEC
/goo.gl/uWM7nF

Self-Regulatory Organization (SRO) Rulemaking and National Market System (NMS) Plans
SEC
NASDAQ: Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 1, Relating to the Exchanges Offering of Remote ITCH to Trade Options Wave Ports (Release No. 34-77765; File No. SR-NASDAQ-2016-033)
/goo.gl/h0yuDn

ISDA Launches Resolution Stay Jurisdictional Modular Protocol
ISDA
The International Swaps and Derivatives Association, Inc. (ISDA) today announced the launch of a Protocol that will enable market participants to comply with new regulations aimed at ensuring the cross-border enforceability of stays on contractual termination rights.
goo.gl/6krp87

ESMA CLOSED FOR PUBLIC HOLIDAYS ON 5, 6 AND 9 MAY
EDMA
ESMA’s office is closed for public holidays on Thursday 5, Friday 6 and Monday 9 May 2016.
/goo.gl/sI6Xdm

Exchanges & Trading Facilities

Intercontinental Exchange Reports ICE & NYSE April 2016 Statistics
ICE
Daily volume in futures up 14%, cash equities up 15% y/y; Double-digit y/y volume growth in Brent, gasoil, natural gas, power, ags and equity indices
ATLANTA & NEW YORK–(BUSINESS WIRE)– Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today reported April 2016 trading volume and related revenue statistics, which can be viewed on the company’s investor relations website at http://ir.theice.com/ir-resources/supplemental-information in the Monthly Statistics Tracking spreadsheet.
goo.gl/FWwvMp

***DA: The company announced a second quarter dividend of $0.85.

ICE shelves plans for London bourse counter bid
BY NOOR ZAINAB HUSSAIN AND RICHA NAIDU – Reuters
The New York Stock Exchange’s owner has shelved plans to make a counterbid for London Stock Exchange (LSE.L) that could have derailed the British firm’s planned merger with Deutsche Boerse.
goo.gl/0iDdwH

***DA: Read ICE’s official statement HERE

ICE boss attacks LSEG management; rules out counterbid; The ICE chief said there was “disappointing” interaction with LSEG management over potential merger talks.
By Joe Parsons – The Trade
Jeff Sprecher, CEO and chairman of IntercontinentalExchange (ICE), has slammed the London Stock Exchange Group (LSEG) chairman and CEO for refusing to hold potential merger talks.
goo.gl/ppFihh

Euronext Derivatives Added to McKay Brothers’ Quincy Extreme Data Service
PR Newswire
McKay Brothers International has added Euronext Equity Index Futures to its industry-leading Quincy Extreme Data (QED) service. The QED service now offers select Euronext instruments at the lowest known latency at major UK trading centers. Latency to Slough-LD4 is 273 microseconds, Interxion-LON2 is 140 and Quincy’s Central London POP adjacent to the LSE is 142.
jlne.ws/1Wa09iQ

Here’s Singapore Exchange Limited’s Response to Competition from Hong Kong’s Stock Exchange
The Motley Fool Singapore
The comment above from Li may have stirred up an interesting question during Singapore Exchange Limited’s (SGX: S68) earnings briefing.
Here, Li was commenting on Hong Kong stock exchange’s push to launch renminbi currency futures contracts against the Indonesian rupiah and Malaysian ringgit. His aforementioned comment hinted that there is more to come.
jlne.ws/23rGLx3

TMX Group Consolidated Trading Statistics – April 2016
Mondovisione
TMX Group Limited today announced April 2016 trading statistics for its marketplaces – Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange (Alpha), Montréal Exchange (MX) and NGX.
goo.gl/gK0W3g

Moscow Exchange Indices Monthly Review: April 2016
Mondovisione
In April, Moscow Exchange’s Indices reflected the positive trend on the Russian stock market. The MICEX Index was up 4.38% to 1,953.05 (from 1,871.15 on 31 March), while the dollar-denominated RTS Index rose 8.55% to 951.11 (from 876.20).
goo.gl/723L3c

EEX enables individualization of Market Messages Service
EEX
Dear trading participants,
EEX is pleased to inform you that its Market Messages Service via Yahoo Messenger can now be tailored to your individual preferences. This service enables trading participants to be informed about specific market situations on the EEX market, via the Yahoo Messenger during the core business hours between 9:00 am and 6:00 pm CET.
/goo.gl/bOJUQ2

Everything you need to know about ‘cross-listing’ and ‘self-listing’ on exchanges; 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, arguing that it is an accepted practice in developed markets. We take a look at some common terms associated with listing of exchanges and why NSE has been reluctant to cross-list its shares:
goo.gl/s0iktk

Arrangements for Adjustment of MTR Structured Products, Futures and Options
HKEx
Hong Kong Exchanges and Clearing Limited (HKEX) has announced the arrangements for the adjustment to MTR Corporation Ltd (MTR) structured products, futures and options to account for MTR’s special dividend.
goo.gl/GKT5aO

Technology

G. H. Financials & Celoxica release new trading platform
Automated Trader
Celoxica’s platform will provide G. H. Financials clients with access to all futures markets, including CME Group trading venues, market data integration and execution with optimised feed handler and DMA risk management and gateways, all with single digit microsecond wire-to-wire performance.
jlne.ws/1Wa0RNc

Citigroup Inc to Roll Out Voice Recognition in Asia
By Abdul Wasay – Bidnessetc.com
Citigroup Inc. (NYSE:C) plans to extend its Internet and mobile banking services by including voice recognition technology under its banner. The voice recognition service will now be available to the bank’s retail customers in Asia, as per Bloomberg. Previously, the bank launched the service for its credit card customers in the US.
goo.gl/TsFGPF

Digital disruptors: The digitalisation of Asian structured products
Risk.net
The Asian structured products market is undergoing a technological revolution, which promises to smash the orthodox relationships between the buy and sell sides, and overwhelmingly increase the choices available to the end-investor. Leonteq is one firm at the crest of this new wave.
goo.gl/Rqc3v9

GBST Study Outlines Success Scenarios for Blockchain in Capital Markets
Press Release
GBST Holdings Limited has released the findings of its initial study into blockchain technologies for international capital markets participants. Tracking the ongoing benefits of digital disruption, the “Four scenarios for Blockchain in Capital Markets” discussion paper identifies the importance of distributed ledger technology and smart contracts as they potentially reduce inefficiencies and costs, as well as create new market infrastructure capable of challenging traditional capital markets operators.
jlne.ws/1Wa0q5p

Misys Named Best Portfolio Management Software Provider In HFM European Services Awards 2016 – Misys FusionInvest recognised For Its Ability To Simplify The Investment Management Process And Deliver Real-Time IBOR
Mondovisione
Misys, the global financial software and services company, has been named Best Portfolio Management Software Provider at the HFM European Hedge Fund Services Awards. Misys FusionInvest receives this award in recognition of its ability to simplify the investment management process, with a combination of market-leading portfolio management capabilities and a real-time investment book of record (IBOR) backbone.
goo.gl/wpudlx

Politics

Gundlach Warns of Debt in a Donald Trump Presidency
Bloomberg
In today’s “Morning Must Read,” Bloomberg’s Francine Lacqua highlights comments from Doubleline Capital Founder Jeffrey Gundlach on a buildup of debt in a Donald Trump presidency. She speaks with Paul Gruenwald, Asia-Pacific chief economist at S&P Global, on “Bloomberg ‹GO›.” (Source: Bloomberg)
goo.gl/TOKVRa

Hedge Funds & Managed Futures

Ex-Citi oil options head enjoys the hedge fund life; GZC’s Elbhar rode oil spread trade to 40% annual return in 2015
Roberto Barros – Risk.net
Vincent Elbhar is still marvelling at his good fortune. In 2015, a year when many commodity hedge funds struggled, he helped deliver an annual return of just over 40% to his investors. “It was one of those situations where all of our ideas played out as expected,” says Elbhar, a co-founder and portfolio manager at GZC Investment Management, a Switzerland-based hedge fund with some $200 million in assets under management. “In general, we get some things right and some things wrong, aiming to have…
goo.gl/uZeXIV

On Bull-Market Brink, Citi Sees Commodity Gains as Goldman Jeers
Luzi-Ann Javier, Megan Durisin – Bloomberg
Flows into global commodity ETFs reach $18.3 billion this year; `Doesn’t really make sense’ to be bearish, Citi’s Wilson says
Commodity bulls, it might finally be time to exhale.
goo.gl/C2fCHm

Old Mutual Wealth sees inflows soar 80% year-on-year in Q1; FUM up 3%
Daniel Flynn – InvestmentWeek
Old Mutual Wealth saw net client cash flows increase by 80% year-on-year in Q1 despite ongoing market volatility, while its FUM jumped 3% over the quarter.
goo.gl/SXObTq

Banks & Brokers

Barclays raises nearly $900m in African stake sale
By Max Colchester, Margot Patrick and Matina Stevis, WSJ
Barclays on Thursday said it had raised £603 million ($874.1 million) by selling a 12.2% stake in its African unit to an array of investors, as the British bank pushes ahead with its retreat from the continent.
goo.gl/jY69dr

Barclays makes £600m from stake sale in African subsidiary; South Africa’s state-owned pension fund manager has bought 10% of the shares being sold
by: Martin Arnold in London and Andrew England in Johannesburg – FT
Barclays has recouped just over R13bn (£600m) from selling a chunk of its stake in its African subsidiary at a 7 per cent discount to the market price.
/goo.gl/E54yzY

Credit Suisse takes axe to equities, fixed income divisions
BY ANJULI DAVIES – Reuters
Credit Suisse is cutting around 80 people in its global fixed income business and just under 50 people in its equities division as part of the Swiss bank’s accelerated restructuring programme, a source familiar with the matter said on Wednesday.
goo.gl/W1oefn

Brokers pitch for $900m Good Guys float
THE AUSTRALIAN
UBS, Macquarie, Morgan Stanley and Goldman Sachs are among the banks pitching today and tomorrow for the mandates to the Good Guys initial public offering.
goo.gl/DdsPxG

JPMorgan Securities on Hong Kong ‘name and shame’ list; Latest blow to US bank in Asia after princelings scandal
JPMorgan Securities has found itself on a “name and shame” list in Hong Kong after the stock exchange turned down an application for an initial public offering for which the US bank was acting as a sponsor.
/goo.gl/PxcQ3j

Clearing & Settlement

ICE prepares clearing house changes for European open access; ICE will be required to change their vertical clearing model to allow open impartial access.
By Joe Parsons – The Trade
IntercontinentalExchange (ICE) has begun making changes to its European clearing house in preparation for incoming open access rules.
goo.gl/3mqjEm

TriOptima Completes First triReduce Compression Cycle For Cleared Euro Interest Rate Swaps In Eurex Clearing
Mondovisione
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.
goo.gl/j6kO5n

Bloomberg’s OTC electronic trading connects to Eurex Clearing; Connectivity means traders on Bloomberg’s electronic trading platform can submit OTC trades on Eurex Clearing’s OTC CCP.
By Hayley McDowell – The Trade
Deutsche Boerse’s Eurex Clearing announced it has connected with Bloomberg’s OTC electronic trading platform as a trade source.
goo.gl/MBiCin

Automated Clearing And Settlement System Designated As Prominent – Finance and Banking
Mondaq
On May 2, 2016, the Bank of Canada designated the Automated Clearing and Settlement System (ACSS) operated by the Canadian Payments Association as a system that has the potential to pose payment system risk (a Prominent Payment System). This designation means that the ACCS will now be overseen by the Bank of Canada in accordance with the provisions of the Payment Clearing and Settlement Act (Canada).
jlne.ws/23rFciJ

Indexes & Products

China’s A-Shares, MSCI, understatement and egg futures
Financial Times
If you look closely at this chart you may be able to spot the moment that MSCI realised how lucky they were that they hadn’t yet included China’s A-shares in their EM pot…
jlne.ws/23rFkyJ

Market watch: Buoyed by upcoming MSCI review, index gains
The Express Tribune
Buoyed by speculation over Pakistan’s possible reclassification as an emerging market in the MSCI’s upcoming annual review, the benchmark-100 index stormed past the 35,000-point barrier with ease, ending 1.2% higher on Wednesday.
jlne.ws/23rFqXc

Seven Sector Index Futures Contracts to Debut at HKEX on 9 May
HKEx
The seven sector index futures contracts to be rolled out by Hong Kong Exchanges and Clearing Limited (HKEX) on Monday, 9 May 2016 will enable investors to gain exposure to a basket of stocks in a key segment of Hong Kong’s securities market
goo.gl/RQH4yX

New ETFs: A Sustainable World & Smart-Beta Bonds
ETFdb.com
As we continue to press on into the second quarter of the year, issuer activity in the exchange-traded fund (ETF) space continues to be brisk. As expected, most of the new offerings in the space have been smart-beta or fundamental indexed-focused. As investors have clamored for more products that deliver better than average returns, Wall Street has delivered.
jlne.ws/23rGfPR

The Best Strategy to Implement Smart-Beta ETFs into Portfolios
ETF Trends
Smart-beta or alternative index-based exchange traded fund (ETF) strategies have quickly gained traction among financial advisors and investors seeking to enhance portfolio returns or smooth out their investment ride.
jlne.ws/23rGp9K

MSCI Hires Kathleen Winters as CFO
Naija247news
MSCI (NYSE:MSCI), a provider of investment decision support tools, including indexes, hired Kathleen Winters as chief financial officer, effective May 2. She will succeed Bob Qutub, who is retiring from the firm.
jlne.ws/23rFPsI

Enforcement

SEC Charges Unregistered Brokers with Pocketing Investor Money
SEC.gov
The SEC alleges that James R. Trolice and Lee P. Vaccaro raised approximately $6 million from more than 100 investors by creating a false sense of urgency and exclusivity around the offering, claiming that only a limited amount of warrants were available and that they eventually could be exercised at a very profitable price. Trolice further lured investors by showcasing his apparent wealth and hosting elaborate investor parties at his multi-million-dollar home. He also touted his purported track record of bringing startup companies public and obtaining high returns for investors. Meanwhile, Trolice allegedly used investor funds to pay his mortgage along with other bills for a credit card, car lease, college tuition, and landscaping. Vaccaro allegedly spent at least a quarter-million dollars in investor funds at Las Vegas casinos.
jlne.ws/1Y8Ll20

Tom Hayes Taps Crowdfunding to Raise $218,000 for Appeal
Suzi Ring, Liam Vaughan – Bloomberg
Ex-UBS trader is serving an 11-year sentence for rigging Libor; FundRazr Website says Hayes has raised about 2,100 pounds
Tom Hayes, the former UBS Group AG trader serving 11 years in prison for rigging Libor, has turned to crowdfunding to raise 150,000 pounds ($218,000) for an appeal.
goo.gl/0fQy0J

Jailed Libor trader Tom Hayes plans fresh appeal; Lawyer who acted for Asperger syndrome hacker hired for challenge based on ‘fresh evidence’
by: Caroline Binham, Financial Regulation Correspondent – FT
The former UBS and Citigroup trader jailed for 11 years for conspiring to manipulate Libor is making a last-ditch attempt to appeal his conviction.
/goo.gl/8OMgpj

Environmental & Energy

OPEC to Head for June Talks Without Plan for Supply Limits
Grant Smith – Bloomberg
Freeze plan may no longer be necessary as market improves; Discord remains as members fail to agree on long-term strategy
There are currently no proposals on the table for OPEC to revive limits on crude output at its June meeting after the failure of talks to freeze production last month, according to six delegates from the group.
goo.gl/spXPUO

The Unloved Business That’s Saved Big Oil From Low Energy Prices
Javier Blas – Bloomberg
Petrochemical earnings accounted for 75% of Exxon’s net income; Oil executives see future for chemicals beyond crude rout
Big Oil is suddenly Big Chemical.
goo.gl/kQm9pd

Scientists May Have Found The Key To Motivating People To Act On Climate Change
BY ALEJANDRO DAVILA FRAGOSO – Think Progress
Motivating people to act on climate change is a constant struggle for governments and nonprofits. But a new study may have found how best to frame the issue to inspire people not just to act, but also to give.
goo.gl/V9Hj52

Climate-Driven Water Scarcity Could Hit Economic Growth by Up to 6 Percent in Some Regions, Says World Bank
Yubanet
Water scarcity, exacerbated by climate change, could cost some regions up to 6 percent of their GDP, spur migration, and spark conflict, according to a new World Bank report released today.
goo.gl/2H8w3X

Asia-Pacific

Hong Kong cracks down on illegal money flows from mainland China trade
South China Morning Post
Hong Kong is conducting a multipronged customs, shipping and financial sector crackdown against so-called fake trade invoicing that allows billions of dollars of capital to leave mainland China illegally.
jlne.ws/23rGyds

London’s Hong Kong dreams – POLITICO
Politico
Pro-Brexit campaigners in the City of London fancy a future unshackled by Brussels rules, meddlesome bureaucracies and stifling regulations.
Dream on.
Even if Britain decides to break away from the EU on June 23, the idealistic view of a financial sector run purely in the interest of U.K. bankers is unlikely to become a reality.
jlne.ws/23rGUAG

Hong Kong should develop itself as a mainland bond trading hub, think tank says
South China Morning Post
Hong Kong will need to develop a bond connect programme with the mainland and develop more yuan investment products if it is to retain its role as the leading offshore renminbi centre, as new competition emerges from other markets, according to a government think tank.
jlne.ws/23rGFFL

World’s first diamond trading exchange going live from today
India has a major share in cutting and polishing of diamonds, with 90% of global work
Rajesh Bhayani – Business Standard
The Singapore Diamond Investment Exchange (SDiX), the world’s first and only commodity exchange trading in physically settled diamonds, is going live from Thursday. This could change the way diamonds are traded.
goo.gl/DZ2Mcx

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

Frontier Markets

Mutual funds manage to keep 20-yr streak going; If a person invested Rs 1,000 per month as SIP for 20 years, these schemes would have turned the Rs 2.4 lakh into Rs 55 lakh
Chandan Kishore Kant – Business Standard
India’s equity mutual fund schemes, with over two decades of track record, have made hefty wealth for investors. Investments made through the monthly systematic investment plans, popularly known as SIPs, are at multifold valuations currently.
goo.gl/n8qQDQ

Higher derivatives lot size boosts margin-funding biz; The temporary client funding book of brokers has grown to about Rs 6,000 cr now from Rs 4,800 cr about 10 months ago
Ashley Coutinho – Business Standard
The temporary client margin-funding business offered by brokers has grown 25 per cent in the past 10 months as increase in the lot size of derivatives contracts has prompted retail (small) investors to shift to the cash market and borrow more.
goo.gl/kY51IU

Is the Emerging Markets Rally Built on Flimsy Foundations?; Investors need evidence that emerging-market countries aren’t just coasting
By RICHARD BARLEY – WSJ
From sunk to soaring, the turnaround in the mood on emerging markets since the start of the year is startling. The change in sentiment is powerful, but it increasingly needs support from growth.
goo.gl/oqp1MX

Miscellaneous

Imagining A New Bretton Woods
by Yanis Varoufakis – Social Europe
The financial meltdown of 2008 prompted calls for a global financial system that curtails trade imbalances, moderates speculative capital flows, and prevents systemic contagion. That, of course, was the goal of the original Bretton Woods
/goo.gl/1xuKpF

Food traders stuck in the hard times; ADM, Bunge and Cargill have been hit by bumper harvests and the slowdown in emerging markets
by: Gregory Meyer in New York and Neil Hume in London – FT
A recent bout of poor weather has damaged South America’s corn and soyabean crops, and this has provided a rare reason for optimism at some of the world’s largest traders of food.
/goo.gl/iwcnFq

Why the world has too much steel
Economist
THE two giant furnaces at Port Talbot steelworks, Britain’s biggest, were still hard at work this week, pouring out vast quantities of molten iron. But production of steel from iron ore here may soon come to an end.
goo.gl/yy15MO

Which markets are closed for Ascension Thursday?
MarketWatch
jlne.ws/1UBly3r

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