Take One: Data and Fintech Rocking The Free World
By Jim Kharouf, John Lothian News
Over the past two years, market participants have bemoaned the monetization of data by the largest exchanges.
CME raised the ire of the trading community last year with the increased data fees, especially at a time when many in the trading community were hurting from new regulation requirements, more technology investments to meet those demands, and a generally lousy trading environment with not a lot of movement in key markets. And there is the ongoing grumbling of traders that it is they who create the prices, not the exchange, and without them, there wouldn’t be any data to sell at all.
But an interesting thing is now happening in the data world. It is being given away for free in various new and interesting ways. True, this end-of-day data, along with various other types of data that is packaged, is not realtime. But that too may be of less importance to a growing number of traders who have discovered that the pure speed game is more or less over and the revived game of trading strategy has reemerged with the rise of more flexible and accessible trading technology.
What is emerging are platforms such as Barchart Direct, which puts all its historical market data on the cloud; Quandl, a free storehouse of all types of financial data; and Estimize (see the FinTech Exchange Chicago presentation HERE) a free site for earnings and economic estimates – all of which are challenging the status quo of Thomson Reuters, Bloomberg and others. Meanwhile, even Trading Technologies is getting into the act, offering its customers free access to Fundamental Analytics.
Remarks of Chairman Timothy G. Massad before the FIA International Derivatives Conference
***** Live from IDX!
CME Group Foundation Awards Grant to Saint Xavier University Graham School of Management
The CME Group Foundation has awarded a $50,000 grant to Saint Xavier University’s Graham School of Management (GSM) to further support its state-of-the-art finance curriculum, particularly in the derivatives area. This is the second grant the Foundation has awarded to the university; an initial grant of $100,000 from the Foundation enabled the Graham School of Management to build a solid base for the Center for the Study of Financial Markets and Derivatives (CSFMD). Further, it enabled the GSM to develop and advance an ambitious vision for finance education at SXU.
***** You can’t go wrong giving a Saint a hand.
WFE Names David Thomas As Head Of Communications
WFE welcomes David Thomas to the Federation as Head of Communications from 8 June 2015, the first key hire this year.
***** Did he write his own press release?
Hong Kong Wants Stock Trading Limits to Combat Fat Fingers, Rogue Algorithms
by Eduard Gismatullin, Bloomberg
Hong Kong’s markets regulator will back a plan to stop fat fingers and rogue algorithms from causing erroneous swings in the city’s biggest stocks.
***** Welcome to the 1990s.
The $6.5 Trillion China Rally That’s Making Stock-Market History
by Kyoungwha Kim, Bloomberg
It’s enough money to buy Apple Inc. eight times over, or circle the Earth 250 times with $100 bills. The figure, $6.5 trillion, sums up the value created in just 12 months of trading on Chinese stock exchanges — and why some see a rally that’s gone too far.
***** Welcome to 2015!
I lost $100 million — and I’ve never been happier; Author Suzanne Corso went from welfare to $100 million nest egg — and then came the 2008 financial crisis.
By JANE RIDLEY
Manhattan writer Suzanne Corso, 46, was once a card-carrying member of the 1% — until her financier husband lost their $100 million nest egg in the 2008 fiscal meltdown. Here, the mother of one, who has just published her third novel, “Hello, Hollywood,” tells The New York Post’s Jane Ridley her very New York story of survival.
***** Wife of former NYSE Specialist writes a happy ending.
Patrick Young’s Trading Places Column June 2015 – IDX Issue: In Patrick’s Opinion – A Fragile Ecosystem
Make no mistake this is a derivatives world.
However, make no mistake either, this ought to be inevitable but cannot be taken for granted.
The derivatives industry has suffered execrable PR for many years now. This has been largely driven by the combined forces of banks which were deploying the risk management strategy you’d expect from footballers’ wives facing a string of designer boutiques, along with complete practitioner incoherence coherently endorsing the positives. Thus the battle in the public eye has been almost lost. Meanwhile the industry continues to score remarkable own goals. On the retail plane FXCM and Plus500 could apparently have benefited from even some footballers’ wife management consultancy, while in wholesale markets the banks created massively complex beasts favouring one client and sold them to people on fixed salary scales in local government…
There needs to be coherence in messaging and understanding, as opposed to an ongoing obsession with lobbying to the blob in gobbledygook.
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SGX appoints Loh Boon Chye as new Chief Executive Officer
The Board of Directors of Singapore Exchange (“SGX”) is pleased to announce the appointment of Mr Loh Boon Chye as its new Chief Executive Officer (CEO). He will commence his appointment on 14th July 2015.
CME to change grain sessions when open-outcry futures pits close
BY TOM POLANSEK
CME Group Inc next month will end the long-running practice of allowing traders to square up positions in grain and oilseed futures during a short period after the markets close, the company said on Monday. The change is set to take effect on July 6 in connection with CME’s closure on July 2 of most of its futures pits, including those for grains like corn and wheat, according to a notice sent to customers.
ICE chief hits out at exchanges, banks and brokers
The Trade News
Intercontinental Exchange chief executive Jeffrey Sprecher has called out exchanges, brokers and banks for fragmenting liquidity which has ultimately hit institutional investors.
Fidessa launches new order analytics service for derivatives
Continues rollout of derivatives algo capabilities
Fidessa group plc (LSE: FDSA) today announced the launch of a powerful new order analytics service for its derivatives community that brings greater precision to the control and measurement of derivatives algos.
British bank body was warned of distorted Libor as early as 2005, court told
BY ANJULI DAVIES, Reuters
The British trade organisation in charge of benchmark interest rates was warned as far back as 2005 that some banks were deliberately distorting their Libor rates for profit, according to evidence given on Monday at the trial of a former trader accused of rate rigging.
HSBC eyes $5bn in annual cost savings
Nathalie Thomas and Patrick McGee, FT
HSBC said it is targeting annual cost cuts of up to $5bn a year but stayed mum on the subject of any job losses as the bank’s chief executive, Stuart Gulliver, unveiled his latest plans to simplify Europe’s biggest bank by assets.
SGX must ‘adapt to stay ahead’, says new chief Loh Boon Chye
Jeremy Grant and Philip Stafford, FT
Loh Boon Chye, on Monday appointed new chief executive of SGX, said the Asian bourse needed to “adapt to stay ahead” as the former top Singapore banker prepared to take the reins from incumbent Magnus Böcker.
Trading Technologies Will Connect to Nasdaq’s European Commodities Market
Direct Market Access to Key European Energy Benchmarks & Freight
Trading Technologies International, Inc. (TT), a global provider of high-performance professional trading software, and Nasdaq today announced TT will introduce connectivity to Nasdaq’s European commodities operations, including the exchange group’s Nordic benchmark power market and German power contracts, through its new TT platform. This next-generation trading platform with mobile capabilities will give traders across Europe access to several markets, from a single trading screen.
Review to seek new laws banning manipulation of markets
Patrick Jenkins, Financial Editor, FT
New laws banning manipulation of markets such as foreign exchange and the creation of a market standards body to oversee conduct are expected to figure in a big review of UK financial regulation to be published on Wednesday.
The Alleged Flash-Trading Mastermind Lived With His Parents and Couldn’t Drive
by Suzi Ring, John Detrixhe, Liam Vaughan, Bloomberg
Navinder Singh Sarao will never rank among the most notorious inmates of HM Prison Wandsworth.
Huw Jones’s Trading Places Column June 2015 – IDX Issue: Build It – But Will They Come?
Being the new kid on the block is not easy but if you’ve been around some of the other blocks already then you should know a thing or two – a bit like those behind Aquis Exchange and Plato, Europe’s trading challengers.
Supreme Court to Hear Case Offering Opportunity to Limit Class-Action Suits; Appeal by Tyson Foods questions use of statistical tools to determine liability and damages
By BRENT KENDALL, WSJ
The Supreme Court on Monday agreed to take up a Tyson Foods Inc. appeal that could give the justices another chance to limit class-action lawsuits, this time over the use of statistical methods to determine liability and damages.
Bond-Market Volatility Triggers Alarms; U.K.’s debt agency chief raises prospect that swings could cause investors to balk at buying bonds at auction
By CHRISTOPHER WHITTALL and KATY BURNE
Regulators and government officials are becoming increasingly worried about rising volatility in government bond markets.
Federal Judge Rules SEC In-House Judge’s Appointment ‘Likely Unconstitutional’; SEC administrative case put on hold pending decision by federal judge on constitutional challenge
By JEAN EAGLESHAM, WSJ
A federal judge ruled Monday that the Securities and Exchange Commission’s use of an in-house judge to preside over an insider-trading case was “likely unconstitutional,” a potential blow to the agency’s controversial use of its internal tribunal.
CFTC Releases Rule Enforcement Review of the Minneapolis Grain Exchange, Inc.
The Commodity Futures Trading Commission’s Division of Market Oversight (Division) issued the results of a rule enforcement review of the Minneapolis Grain Exchange, Inc. (MGEX).
SEC Names Richard R. Best as Regional Director of Salt Lake Office
The Securities and Exchange Commission today named Richard R. Best as Regional Director of its Salt Lake office.
Self-Regulatory Organization (SRO) Rulemaking and National Market System (NMS) Plans
- CBOE: Notice of Filing of Proposed Rule Change to Expire CBOE Volatility Index (VIX) Options Every Week (Release No. 34-75120; File No. SR-CBOE-2015-050; June 8, 2015); see also Exhibit 5
- ICC: Notice of Filing of Proposed Rule Change (Release No. 34-75119; File No. SR-ICC-2015-009; June 8, 2015)
- NYSE Arca: Notice of Filing of Amendment No. 1 and Order Instituting Proceedings to Determine Whether to Approve or Disapprove a Proposed Rule Change, as Modified by Amendment No. 1 Thereto, to Amend NYSE Arca Equities Rule 8.600 to Adopt Generic Listing Standards for Managed Fund Shares (Release No. 34-75115; File No. SR-NYSEArca-2015-02; June 5, 2015); see also Exhibit 5
Exchanges & Trading Facilities
Deutsche Börse develops central platform for pan-European intraday power market; Five European power exchanges to use Deutsche Börse technology for joint European power market
Deutsche Börse will develop and operate the technical infrastructure and various IT applications for a joint European intraday power market within the framework of the European Cross Border Intraday Initiative (XBID). The European exchanges involved in XBID – APX/Belpex, EPEX SPOT, GME, Nord Pool Spot and OMIE – signed a contract with Deutsche Börse on 9 June 2015. The XBID platform is expected to launch in 2017.
Thomson Reuters outlines FX Platform upgrades
Thomson Reuters has upgraded its Electronic Trading platform by integrating liquidity from its multi-bank platform FXall into the ET platform for the first time.
Irish Stock Exchange Announced As The 50th Best Workplace In Europe
The Irish Stock Exchange (ISE) has been been ranked the 50th best workplace in Europe in the small to medium category (50-500 employees) for 2015 by Great Place to Work® (GPTW). GPTW is a global research, consulting and training firm that helps organisations identify, create and sustain great workplaces through the development of high-trust workplace cultures. This achievement is particularly impressive given the European shortlist is such a competitive process, with 2,300 organisations employing 775,000 employee across 19 European countries being involved.
Euronext Welcomes The Bond Listing Of Econocom On Its Alternext Brussels Market
Euronext Brussels announces the successful admission to listing on its Alternext market of corporate bonds issued by Econocom, a major player specialising in the digital transformation of businesses.
Nasdaq’s Directors Desk Expands Presence In Canadian Market – New Regionally-Based Data Centers Will Support Growing Client Base
Nasdaq (Nasdaq:NDAQ) announced the expansion of their Directors Desk corporate governance offering, one of the world leaders in electronic board portal workflow and content delivery, into Canada via the establishment of two new data centers in Ontario. This will enable Nasdaq to more effectively service clients, and similar to the existing data centers in the U.S. and Sweden, the Canadian servers will be audited against SSAE 16 level II standards.
Hedge Funds & Managed Futures
Rhode Island’s $2 Billion in ‘Preventable Losses’ in Alternative Assets
by Timothy W. Martin, WSJ
California isn’t the only state where outside money managers are under scrutiny.
Rhode Island’s public-employee pension has incurred $2 billion in “total preventable losses,” partly because of investments in external real estate, private equity and hedge funds, according to an 81-page report from Benchmark Financial Services Inc., which does “forensic investigations” of money managers and pensions.
Stifel to Buy Barclays’ U.S. Wealth Management Unit
By MICHAEL J. de la MERCED, NY Times
The Stifel Financial Corporation on Monday embarked on yet another acquisition in a yearslong buying spree, this time seeking to purchase Barclays’ American wealth management business.
Iceland Warns Hedge Funds Against Suing After Imposing Tax
by Omar Valdimarsson, Bloomberg
The prime minister of Iceland said any hedge fund planning to challenge the legal basis of a planned tax on failed bank assets should think again.
Investcorp Plots Hedge Fund, Real Estate Push as Founder Retires
by Kiel Porter, Dinesh Nair, Bloomberg
Investcorp Bank BSC, the Bahrain money manager whose founder is stepping down after three decades, is planning to rebuild its hedge-fund business and move back into European real estate.
Old Mutual to bolster funds by selling stake in asset manager
Phakamisa Ndzamela, FT
Old Mutual, the FTSE 100 listed insurer, is to bolster its funds with the sale of a tranche of shares in Old Mutual Asset Management in the US.
Banks & Brokers
Deutsche Bank shares soar but fail to offset European falls
By Sudip Kar-Gupta and Lionel Laurent, Reuters
Shares in Germany’s largest lender, Deutsche Bank, surged almost 4 percent on Monday on the appointment of a new CEO, but failed to offset a broader sell-off in European equities as bond yields and the euro rose.
New Deutsche Bank CEO to Tackle Cost-Cutting, Regulatory Challenges; CEO John Cryan faces restructuring, mending fences with regulators
By EYK HENNING and MADELEINE NISSEN
While Deutsche Bank AG’s co-chief executives tried to move beyond lawsuits, scandals and management shake-ups over recent months, their boss, Chairman Paul Achleitner, already had engineered a backup plan to move beyond the duo with a new CEO.
Regulator Said to Have Pressed for Exit of Deutsche Chiefs
By JACK EWING and PETER EAVIS, NY Times
When the two executives who lead Deutsche Bank, Germany’s largest bank, unexpectedly announced their resignations on Sunday, pressure from angry shareholders was widely seen as the chief factor. But German regulators also played a role in the departures at the bank, according to two people briefed on the events that contributed to the leadership upheaval.
Weak markets and new rules left Deutsche chiefs with tough task
James Shotter in Frankfurt, FT
When they took control of Deutsche Bank in mid-2012, Anshu Jain and Jürgen Fitschen were not inheriting an easy legacy.
Anshu Jain’s Painful Lessons for New Deutsche Boss
Deutsche Bank’s new chief executive needs to learn some painful lessons from Anshu Jain.
HSBC to Sell Units in Brazil and Turkey and Shrink Investment Bank
HSBC will take an axe to its investment bank and seek to cut up to $5 billion in costs in an effort to improve its sluggish performance, Europe’s biggest bank said on Tuesday.
HSBC to slash investment bank, lowers return targets
HSBC (HSBA.L) will take an axe to its investment bank and seek to cut up to $5 billion in costs in an effort to improve its sluggish performance, Europe’s biggest bank said on Tuesday.
Deutsche Bank Surprise CEO Pick Brings Turnaround Record
by Zeke Faux, Michael J Moore, Noah Buhayar, Bloomberg
Deutsche Bank AG is turning to a British takeover specialist who helped reshape two of the world’s biggest banks as it seeks to end years of missed targets and underperformance.
No Easy Fix for Cryan at Deutsche Bank Once Applause Dies Down
by Elena Logutenkova, Bloomberg
John Cryan helped resuscitate UBS AG as finance chief after its state bailout. In leading Deutsche Bank AG, he may face an even tougher challenge.
Swiss Bankers Losing Secrecy Helps Image Abroad, Finma CEO Says
by Giles Broom, Bloomberg
Swiss banks that aren’t dependent on the country’s crumbling financial secrecy laws may find international expansion easier than those that sold hidden accounts in the past, according to Switzerland’s financial supervisor.
Clearing & Settlement
Compression of swap trades gains pace as banks tear up old trades
Joe Rennison, FT
The global derivatives market contracted in notional size during the second half of 2014, driven by banks tearing up old outstanding trades in order to reduce capital requirements.
Collaboration key for clearing success
Futures & Options World
Citigroup has in recent years forced itself up the league tables in futures and now stands as a top three player in most of the world’s key regions. This is largely down to the work of Jerome Kemp, who joined the US bank from JP Morgan in 2011, and the steady investment in staff and technology made by the bank over recent years.
Europe postpones deadline for agreement on clearing house capital requirements
The cost to EU banking groups of trading through US clearing houses was expected to rise on 15 June because of EU rules on banks’ capital requirements. Under rules introduced after the banking crisis EU banks must ensure they have capital to cover part of their exposure to derivatives trades transacted through clearing houses.
Leverage ratio threatens clearing viability, warns FIA
The swaps clearing mandate under the European Markets Infrastructure Regulation is not viable unless regulators relent on Basel III leverage ratio requirements that treat client segregated margin as a levered asset on the balance sheet, the Futures Industry Association in Europe has warned.
Profit & Loss Talk Series: Ted Leveroni
Profit & Loss
In the latest P&L Talk Series interview, Ted Leveroni executive director – strategy and buy side relations with the Depository Trust and Clearing Corporation, explains the evolution of collateral management processes to Profit & Loss. With original G20 deadlines for completing derivatives regulation effectively extended, Leveroni discusses the preparations the industry must make to deal with increased margin call volumes under new timeframes and how firms can ensure they are implementing the most effective processes to address new requirements.
The Most Frequently Asked Question About Mobile Payments
“Are we there yet?” is the most frequently asked question in the world. But kids aren’t the only ones asking that question. People in payments often ask that question of each other, too. And perhaps around 5 billion times a year.
BitBeat: Blockstream Unveils Much-Awaited First Sidechain Prototype
By MICHAEL J. CASEY, WSJ
The “Sidechain Elements” software contains various features that could be appealing to institutions wanting to leverage bitcoin’s decentralized, peer-to-peer network in new, middleman-free business models. In particular, it includes applications that could help startups disrupt certain Wall Street processes.
Indexes & Products
James Brown on MSCI derivatives: “Seeing the Wood for the Trees”
In his personal blog, James Brown talks about why Eurex Exchange can offer the most compelling MSCI product suite to the end investor.
2 New ETFs to be Listed on July 15, 2015(Wed.) -Rakuten Investment Management- “Rakuten ETF-Nikkei 225 Leveraged Index” “Rakuten ETF-Nikkei 225 Double Inverse Index”
Japan Exchange Group
ON THE MOVE-BlackRock taps Google scientist to help big data push
BY JESSICA TOONKEL, Reuters
BlackRock Inc, the world’s largest asset manager, has hired Bill MacCartney, a former senior Google research scientist, as a managing director, joining its scientific-active equity team, a company spokesman confirmed to Reuters.
SunGard’s post-trade derivatives utility goes live with Barclays
First Published 9th June 2015
SunGard’s post-trade derivatives utility goes live with Barclays as anchor customer. Goldman Sachs Andrew Whyte appointed as president.
SunGard has announced that its new industry utility for post-trade futures and cleared over-the-counter (OTC) derivatives operations has gone live with Barclays as the utility’s anchor customer. Barclays has completed the migration of specific futures and OTC derivatives clearing operations and technology processes to the utility, as well as the transfer of a number of Barclays employees to SunGard.
TT Trade Talk by Patrick Rooney, Product Manager
The evolution of mobile phone technology has been remarkable over the past several years as business and personal applications expand—and in some cases transition—to mobile platforms.
CQG provides connectivity to CRYEX crypto currency platform
First Published 9th June 2015
CQG will give CRYEX market participants an order-routing, risk management and
CRYEX, the new digital currency trading and clearing platform, is partnering with CQG, the trade routing, market data and technical analysis provider, to offer connectivity to its members and participants from launch.
Crypto currencies: Bitcoin options come a step closer
by Helen Avery, Euromoney
Opportunity for banks same as in FX; Goldman investment ‘a positive signal’
An options market for crypto currencies is emerging that could escalate the growth of Bitcoin and Ripple. LedgerX an institutional trading and clearing platform is waiting for Commodity Futures Trading Commission approval to trade and clear options on Bitcoin for the institutional market.
Scott London, Ex-Auditor From Insider-Trading Scheme, Is Out of Prison, Has a Job
By MICHAEL RAPOPORT, WSJ
Scott London is back. The former KPMG LLP audit partner who pleaded guilty in a high-profile 2013 insider-trading case is out of prison, and has a new job, he said Monday during an educational webcast for accountants.
SEC Drops Net 1 UEPS FCPA Probe
By SAMUEL RUBENFELD, WSJ
Net 1 UEPS Technologies Inc.UEPS +0.93% said Monday it received a letter from the Securities and Exchange Commission saying it won’t charge the company with violating U.S. foreign bribery law.
ASIC bans promoter of non-existent fund
ASIC has banned Mr Paul Duncan, of Carrara, Queensland, from providing financial services for four years after an ASIC investigation found he had engaged in misleading and deceptive conduct.
Former director banned from conducting regulated activity
The Financial Conduct Authority has today banned Kevin Allen from performing any function related to any regulated activity.
Environmental & Energy
G7 leaders agree to phase out fossil fuels
Pilita Clark in London and Stefan Wagstyl in Krün, FT
The Group of Seven industrial powers have agreed the world should phase out fossil fuel emissions this century, in a move hailed as a historic decision in the fight against climate change.
Crude slide bolsters Trafigura’s profits and trading margins
Neil Hume and David Sheppard in London, FT
Trafigura has posted record half-year profits and a doubling of trading margins, illustrating how one of the world’s largest commodity trading houses has been a big beneficiary of the collapse in oil prices.
Shanghai Futures Exchange: Notice On Holiday Schedule During The 70th Anniversary Of The Victory Of The Chinese People’s Anti-Japanese War And The World’s Anti-fascist War
According to the Notice on Holiday Schedule during the 70th Anniversary of the Victory of the Chinese People’s Anti-Japanese War and the World’s Anti-fascist War from the CSRC Office (ZJBF?2015?No.26), as well as to the market conditions, the Exchange further clarifies the detailed schedule for continuous trading hours during this anniversary as follows:
Why China is blowing an equity bubble
John Plender, FT
Bubbles come in different shapes and forms, but it is striking how often they are the by-product of attempts to make difficult economic transitions. This was true of the US stock market in the late 1920s as Americans reluctantly stumbled towards the hegemonic global role previously played by the British.
China Deflation Risks Linger, Underscoring Weak Local Demand
China’s consumer prices rose at a slower pace in May and factory-gate deflation extended a record stretch of declines, underscoring tepid demand at home and abroad.
China Shadow Banker Sidesteps Default Concern to Sell Debt
by Lianting Tu, Bloomberg
A Chinese trust company has sold the first dollar bond since the late 1990s, when the industry’s implosion saddled international investors with heavy losses.
Saudi Bourse Opening Up to Wary Foreign Investors; International fund managers take a wait-and-see approach
By NICOLAS PARASIE and RORY JONES, WSJ
The much anticipated opening of Saudi Arabia’s $590 billion stock market to foreign investors next week may start with more of a whimper than a bang, as many international funds take a wait-and-see approach.
Menacorp joins DGCX as Broker Member
The Dubai Gold and Commodities Exchange (DGCX) announced today that Menacorp Financial Services LLC, the UAE’s leading financial services firm, has been approved as a Broker Member of the Exchange.
Merger Boom Spawns a CFO Surplus
By KIMBERLY S. JOHNSON
Many finance chiefs hope to spend the rest of their careers in a comfortable corner office. But the current boom in mergers and acquisitions has cut some of those corner-office stints uncomfortably short.