John Lothian Newsletter: U.S. Is Building Criminal Cases In Rate-Fixing; Trading In Paradise: Green Light For First Seychelles Exchange; U.S. Approves New Rules To Protect Futures Customers

Jul 16, 2012

The U.S. Justice Department is identifying both firms and individuals as prosecution candidates in the unfolding LIBOR scandal. On a related note, Deutsche Bank volunteers to be the First Canary, and help take down its former rate-fixing pals in exchange for a lighter punishment of its own. The Seychelles steps up to create a new exchange, evidently seeing fresh opportunity in globally-declining volumes and industry consolidation. The CFTC takes bold steps in the wake of the MF Global… that is, the PFG scandal, and moves to approve rules to help protect customer funds against yet another looting crisis.

First Read

Swamped Futures Regulators to Oversee Swaps Under Dodd-Frank
Jeff Horwitz – American Banker
The failure of Peregrine Financial Group highlighted weaknesses in regulatory oversight of the commodities market. Instead of getting stronger, however, the current system is about to be stretched a lot thinner.
http://jlne.ws/Q1Hi91

There’s nothing wrong with that structure, says John Lothian, who publishes a stable of newsletters on futures markets. But transposing it to a massive new market “has left some major holes in how these regulatory bodies conduct their primary missions,” he says. “We’ve got the regulation we’ve ordered, which is cheap.”

++++

Insight: PFGBest regulator known for inexperienced auditors
Sarah N. Lynch and Ann Saphir – Reuters
The watchdog that missed for nearly two decades the blatant fraud at failed brokerage PFGBest has frequently sent out fresh college graduates to look over the books of complex financial firms, people familiar with its operations say.
http://jlne.ws/Q1HfKv

**** When the NFA auditors come to the office, it is often mistaken for bring your kids to work day.

++++

The Curious Investor: Fraud puts futures markets to the test
David Roeder – Chicago Sun-Times
I’ll let you in on a secret about futures trading in Chicago, something I’ve picked up in 20 years of following this homegrown, colorful and occasionally brilliant industry. It has a public persona that doesn’t match reality. Think of the sweaty traders, loud, brash and seemingly ready to bust somebody’s nose in the pits. They’re still around, despite a shift to electronic trading, and remain a colorful emblem of Chicago ingenuity. So it might surprise you that there’s another truth about the futures business: It’s full of wusses on the public dole.
http://jlne.ws/Q1Hipo

**** David Roeder with a punch right in the nose of the futures industry.

++++

For CME, It’s Time To Lead
Jeff Carter – Town Hall Finance
PFG Best was the straw that broke the camel’s back in the futures industry. Certain fraud only because Wasendorf was man enough to admit it. Corzine with MF Global hasn’t admitted it. He came from the banking and political culture where you never admit you are wrong. If you repeat the lie long enough it might turn into fact.
http://jlne.ws/Q1Hll8

**** It is time for bold leadership.  I will leave it at that.

++++

New futures contract looks to take on Libor
Reuters via Yahoo! News
A new futures contract could challenge the London interbank offered rate‘s standing as the global interest rate benchmark, as a widening probe into whether Libor was manipulated raises questions about its reliability. On Monday, the NYSE Liffe will launch a futures contract based on the index on trading in the repurchase agreement (repo) market, which is considered more transparent than Libor.
http://jlne.ws/Q1Hipu

**** Good luck to NYSE Liffe US and the GCF Repo Index Futures.

++++

Deutsche Bank Turns Sides, Becomes Rat For The Libor Prosecution
Zero Hedge
Escalation. The inevitable collapse of the Prisoner’s Dilemma that kept the LIBOR contributors together is occurring rapidly. After Barclays’ forced admission and initial fine, the ‘he-who-defects-first-wins’ strategy has been trumped by Deutsche Bank as they turn all ‘Donnie Brasco’ on their oligopolistic peers.
http://jlne.ws/Q1Hlll

++++

LME Clear Selects Cinnober As Technology Partner
The London Metal Exchange (LME) has selected Cinnober, the Swedish software house, as the core technology provider for its clearing house, LME Clear. Cinnober will provide LME Clear with its TRADExpress RealTime Clearing system. This includes real time risk management and clearing functionality. The system will process and clear on-exchange and OTC markets.
http://jlne.ws/Q1HlBF

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Divorce Finance From Commerce
Naked Capitalism
There are growing signs that an intellectual edifice that has dominated economics and finance for about a quarter of a century is starting to crack. Let’s call it the Market-Finance Myth (MFM). It should be self evident, at least for those of us who bother defining our terms, that financial markets need to be considered differently from commercial markets.
http://jlne.ws/Q1HiFU

++++

Judge blasts colleagues for allowing financial patent
Ars Technica
The nation’s top patent court has stopped a lower court from throwing out four patents on financial software, used to sue a bank dealing in foreign currency exchanges. The controversial opinion, countered by a blistering dissent by one member of the three-judge panel, shows that the US Court of Appeals for the Federal Circuit is in disarray about just what is patentable. An abstract idea” can’t win a patent, but the judges on the court are in disagreement about just what that is.
http://jlne.ws/Q1HiFV

++++

For investment firms, sleepy summers are a thing of the past
Reuters via Yahoo! News
Toby Hoden was on vacation early last August when he got the assignment: interrupt his firm’s chief market strategist’s beach vacation and get him into a studio 30 miles away as quickly as possible for an interview on CNBC.
http://jlne.ws/Q1HiFW

***JM: I think this article was intended simply as commentary on the state of business. I found it to be a desperately tragic eulogy for a life that includes — but is not enslaved by — a career.

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Lead Stories

U.S. Is Building Criminal Cases in Rate-Fixing
By BEN PROTESS and MARK SCOTT – NY Times
As regulators ramp up their global investigation into the manipulation of interest rates, the Justice Department has identified potential criminal wrongdoing by big banks and individuals at the center of the scandal.
http://jlne.ws/Q1HiG0

Trading in paradise: Green light for first Seychelles exchange
Michelle Price – Financial News
The Seychelles has taken a big step towards the long-awaited launch of its first stock exchange, which will join a string of new bourses attempting to establish themselves in emerging economies. The Seychellois government has issued a license to establish the country’s first ever exchange operator, called Trop-X Limited, according to a statement released today
http://jlne.ws/Q1HiG1

U.S. approves new rules to protect futures customers
Sarah N. Lynch – Reuters
U.S. futures regulators approved new regulations on Friday to shore up protection of brokerage customer funds following last year’s collapse of MF Global. The Commodity Futures Trading Commission approved the rule on the same day that Russell Wasendorf Sr., the founder of another failed brokerage firm, PFGBest, was arrested on fraud charges in connection with allegedly misappropriating customer money.
http://jlne.ws/Q1HiG2

New York Fed Knew of False Barclays Reports on Rates
By MICHAEL J. DE LA MERCED and BEN PROTESS – NY Times
The Federal Reserve Bank of New York learned in April 2008, as the financial crisis was brewing, that at least one bank was reporting false interest rates. At the time, a Barclays employee told a New York Fed official that “we know that we’re not posting um, an honest” rate, according to documents released by the regulator on Friday. The employee indicated that other big banks made similarly bogus reports, saying that the British institution wanted to “fit in with the rest of the crowd.”
http://jlne.ws/Q1HiG8

Europe’s banks face tougher demands
By Patrick Jenkins, Banking Editor – Financial Times
The head of Europe’s top banking regulator has raised the bar for lenders’ capital requirements, insisting that the 9 per cent capital ratio they had to hit as a “temporary buffer” by June is to become permanent.
http://jlne.ws/Q1HiGb

Barclays To Be Replaced On UAE Interbank Panel – Sources
FOX Business
Barclays PLC, the British bank embroiled in a scandal over Libor rate-fixing, is set to withdraw from a panel that sets benchmark interbank interest rates in the United Arab Emirates, according to two people familiar with the matter.
http://jlne.ws/Q1HiWq

Citi CEO rejects UK bank reform: report
Reuters
Citigroup Chief Executive Vikram Pandit was quoted as saying on Sunday that Britain’s plans to separate retail and investment banks were unnecessary as a series of measures to safeguard against failed banks was already being put in place.
http://jlne.ws/Q1HiWr

Beijing move boosts Singapore Rmb hopes
By Jeremy Grant in Singapore and Robert Cookson in Hong Kong – Financial Times
On China’s long march towards the full convertibility of its currency, the designation of Hong Kong as an offshore financial centre for the renminbi in 2009 was a key step. Now Beijing has signalled its choice of the next location for its experiment, as part of what many economists assume will be the ultimate globalisation of its currency.
http://jlne.ws/Q1HlSj

PFGBest Fraud

Wasendorf Fraud at Peregrine Lasted 20 Years, Prosecutors Say
By Andrew Harris and Linda Sandler – Bloomberg
Peregrine Financial Group Inc. Chief Executive Officer Russell Wasendorf said in a signed statement linked to his suicide attempt that he perpetrated a fraud at his Cedar Rapids, Iowa-based company that stretched back two decades, according to a federal complaint.
http://jlne.ws/Q1HlSm

Peregrine CEO Charged With Lying to Regulators
By Jacob Bunge – Dow Jones
The chief executive of collapsed brokerage firm Peregrine Financial Group Inc. was arrested Friday and charged with lying to regulators, according to the U.S. Attorney’s Office.
http://jlne.ws/Q1HiWC

Peregrine CEO’s Dramatic Confession
By Jacob Bunge, Scott Patterson and Julie Steinberg
The head of collapsed brokerage firm Peregrine Financial Group Inc. admitted to embezzling more than $100 million from clients over nearly 20 years by personally doctoring bank statements and duping auditors with the help of a post-office drop box, federal prosecutors said Friday.
http://jlne.ws/Q1HiWH

Law Firms Ready Class-Action Suit for Peregrine Clients
Jacob Bunge – Dow Jones
Two law firms that represented customers caught up in the collapse of MF Global Holdings Ltd. (MFGLQ) have linked up to prepare a class-action lawsuit on behalf of clients of Peregrine Financial Group Inc.
http://jlne.ws/Q1Hm8E

Peregrine Financial Group: Another Futures Firm Implodes (And What Regulators Should Do)
Seeking Alpha
Nine months after the collapse of MF Global, another futures trading firm has imploded. Peregrine Financial Group (PFG), also known as PFGBest, filed for Chapter 7 in federal bankruptcy court on Tuesday. The filing occurred a day after the firm’s founder, Russell Wasendorf Sr., attempted suicide. Wasendorf is accused of misappropriating customer funds, making false statements and fraud.
http://jlne.ws/Q1Hjd0

Futures Clients Ask: ‘Where’s My Money?’
TATYANA SHUMSKY AND JERRY A. DICOLO – WSJ
Hours after news flashed last week that futures brokerage Peregrine Financial Group Inc. was imploding, Greg Sabatello’s phone was jammed with customers questioning the safety of their money in his $70 million electronic-brokerage firm, TransAct Futures in Chicago. Mr. Sabatello, president of TransAct, told clients their money was safe, but some didn’t take his word for it. Instead, they asked for some of their money back, to make sure it was there, he said.
http://jlne.ws/Q1Hm8I

Regulatory

CFTC Approves New Financial Rules Submitted by the National Futures Association to Strengthen the Protection of Customer Funds Held by Futures Commission Merchants
The Commodity Futures Trading Commission (Commission or CFTC) today approved new financial rules submitted by the National Futures Association (NFA) that enhance protections to customer funds held by futures commission merchants (FCMs). The new financial rules are set forth in NFA Financial Requirements Section 16, and an Interpretive Notice entitled “NFA Financial Requirements Section 16 FCM Financial Practices and Excess Segregated Funds/Secured Amount Disbursements.”
http://jlne.ws/Q1Hm8K

CFTC’s Division of Swap Dealer and Intermediary Oversight Issues Time-Limited No-Action Relief to Certain CPOs and CTAs to Meet Registration and Compliance Obligations
The Commodity Futures Trading Commission’s (CFTC) Division of Swap Dealer and Intermediary Oversight (DSIO) today announced the issuance of time-limited no-action relief for commodity pool operators (CPOs) and commodity trading advisors (CTAs) who have been exempt or excluded from registration but, because of recent amendments to Commission Regulations 4.13 and 4.5, now need to register and satisfy compliance obligations.
http://jlne.ws/Q1Hm8P

SEC Staff Publishes Final Report on Work Plan for Global Accounting Standards
The Securities and Exchange Commission’s Office of the Chief Accountant today published its final staff report on the Work Plan related to global accounting standards.
http://jlne.ws/Q1Hm8Q

S.E.C. Wary on International Accounting Standard
New York Times
Four years ago, the commission seemed enthusiastic about adopting global rules for foreign companies traded in the United States, and set out a schedule that it said could lead to adoption of those rules for American companies.
http://jlne.ws/Q1Hjd6

Analysis: Banks behave badly redux: Is it killing confidence?
Jennifer Ablan | Reuters
It wasn’t supposed to be like this. After the worst financial crisis since the Great Depression almost took the global economy over a cliff, tough new regulations and stronger internal controls at the world’s major banks were meant to help restore confidence in the financial system.
http://jlne.ws/Q1Hjtq

EU Says Libor Probe ‘A Priority’
Dow Jones
European competition chief Joaquin Almunia Friday said recent allegations of rate-rigging of benchmarks such as Libor were a source of major concern and that European Union regulators were making their own investigations into the issue a top priority.
http://jlne.ws/Q1Hmpd

Make banks pay if they cheat on Libor
By Frank Partnoy – Financial Times
As recriminations related to the scandal surrounding the London interbank offered rate continue, one crucial question remains open: how should we fix the way Libor is set? Here is an answer.
http://jlne.ws/Q1Hjtv

London Self-Regulatory System Proves Illusory in Libor Scandal
Bloomberg
As long ago as June 2008, New York Federal Reserve President Timothy F. Geithner was warning the Bank of England that letting bankers set the benchmark interest rate for global finance was open to abuse.
http://jlne.ws/Q1Hjty

Investigations galore
The Economist
It’s not just LIBOR. Banks and brokers are under scrutiny from all quarters
http://jlne.ws/Q1Hmpk

Chuck Jaffe: Money fund reform won’t work
Market Watch
A piggy bank is pretty much like a money-market fund account. Except, writes Chuck Jaffe, no one thinks your piggy bank is broken.
http://jlne.ws/Q1HjtF

Michelle Singletary: Report card for Consumer Financial Protection Bureau
Knoxville News Sentinel
With the Consumer Financial Protection Bureau approaching its one-year anniversary on July 21, I looked back at the agency’s rookie year.
http://jlne.ws/Q1Hmpn

New York Fed Responds to Congressional Request for Information on Barclays – LIBOR Matter
http://jlne.ws/PXT18x

AMF publishes 2012 edition of Risk and Trend Mapping for Financial Markets and Savings
http://jlne.ws/Q1HmFE

[AMF] Financial Regulation Newsletter No 7 – July 2012
http://jlne.ws/Q1HmFG

ASIC makes new rules on suspicious activity reporting and short sale tagging
http://jlne.ws/Q1HmFN

Exchanges & Trading Facilities

Broker scandals demand futures industry reform, CME says
Reuters via Yahoo! News
CHICAGO – Futures exchange operator CME Group questioned on Friday whether brokers should be allowed to hold their customers’ collateral, following the disclosure of massive fraud at failed brokerage PFGBest.
http://jlne.ws/Q1HjJY

CME Group Statement
CME Group today released the following statement:
We are appalled by the recent violations of customer segregated funds that have shaken the very core of our industry. These breaches of trust are completely unacceptable not only to CME Group but also the businesses and individuals who rely on these markets to manage their risk. Without question, the current system in which customer funds are held at the firm level must be reevaluated. CME Group is committed to working with Congress, CFTC, NFA, FIA and market participants to restore confidence in derivatives markets.
http://jlne.ws/Q1HmFU

Seychelles exchange on the drawing board
Market Watch
The Seychellois government has issued a license to establish the country’s first-ever exchange operator, called Trop-X Ltd. Trop-X can now push ahead with plans to build a multi-asset, multi-currency securities exchange, which is expected to begin operating later this year.
http://jlne.ws/Q1HjK7

Institutional Investors Achieve Best Execution for Large-Scale Trades Through Liquidnet During Second Quarter
Business Wire via Yahoo! Finance
Liquidnet, the global institutional trading network, today announced that it continued to maintain its block trading dominance enabling 700 of the world’s leading asset management firms to achieve best execution on their large-scale trades and drive performance during the second quarter of 2012.
http://jlne.ws/Q1HjK9

New futures contract looks to take on Libor
NEW YORK (Reuters) – A new futures contract could challenge the London interbank offered rate (Libor)’s standing as the global interest rate benchmark, as a widening probe into whether Libor was manipulated raises questions about its reliability. On Monday, the NYSE Liffe will launch a futures contract based on the index on trading in the repurchase agreement (repo) market, which is considered more transparent than Libor.
http://jlne.ws/NcqwlO

NYSE Liffe U.S. Begins to Trade in Futures on DTCC Repo Index
NYSE Liffe U.S. began trading in futures contracts based on the Depository Trust & Clearing Corp. repurchase agreement indexes to enhance dealers ability to hedge short-term interest rates.
http://jlne.ws/LsewLQ

[CBOE] Trader E-News
http://jlne.ws/Q1HjKb

[CBOE] Restrictions on Transactions in Hoku Corporation
http://jlne.ws/Q1HmWi

[CBOE] Operational Systems Settings
http://jlne.ws/Q1Hk0u

[CBOE] Operational Systems Settings on Volatility Index Product Settlement Days
http://jlne.ws/Q1HncG

NZX Advises Resignation Of Head Of Direct Products Rachael Newsome
http://jlne.ws/Q1Hk0A

TOM MTF Statistics Week 28
http://jlne.ws/Q1HncM

Hedge Funds & Managed Futures

The Transformation Of Hedge Funds Into Mutual Funds
Zero Hedge
Whether ‘size matters’ or not to the average hedge fund matters is a question many ask; but as Goldman’s Hugo Scott-Gall summarizes perfectly in this chart, it is clear that the preference for herding into the biggest of big caps is becoming ever more crowded.
http://jlne.ws/Q1Hk0G

EDHEC-Risk Institute Proposes A Robust New Method For Assessing Hedge Fund Performance
In a newly-released research publication produced as part of the Newedge research chair on “Advanced Modelling for Alternative Investments,” EDHEC-Risk Institute has evaluated the performance of hedge funds through a non-linear risk adjustment of returns. This methodology is applied to various hedge fund indices as well as to individual hedge funds, considering a set of risk factors including equities, bonds, credit, currencies and commodities.
http://jlne.ws/Q1Hk0J

GLG Forms Asia Equities Team Co-Headed by Former GIC Manager
Bloomberg
GLG Partners Inc., a unit of the world’s largest publicly traded hedge fund manager, formed a long-short equities team in Asia co-headed by a former fund manager at Singapore’s sovereign wealth fund, seeking opportunities in the region’s stock market.
http://jlne.ws/Q1Hk0K

Fortress’s Drawbridge Special Opportunities Fund Named “Best Distressed Hedge Fund” by Hedge Funds Review
Business Wire via Yahoo! Finance
Fortress Investment Group’s Drawbridge Special Opportunities Fund was recognized as “Best Distressed Hedge Fund” at the Hedge Funds Review First Annual Americas Awards.
http://jlne.ws/Q1HncX

Buffett Empowers Deputies by Raising Funds to $8 Billion
Bloomberg
Warren Buffett , the billionaire chairman and chief executive officer of Berkshire Hathaway Inc. , is entrusting more of his company’s investments to deputy stock pickers as he prepares the firm for his eventual departure.
http://jlne.ws/Q1Hkh5

Developed or developing? Try merging markets
By Carolyn Cohn – Reuters
Investors are criss-crossing the increasingly smudged line between emerging and developed markets as the euro zone crisis challenges traditional perceptions of a safe investment.
http://jlne.ws/Q1Hntc

Calif. cities eye plan to seize mortgages
Associated Press via Yahoo! News
In the foreclosure-battered inland stretches of California, local government officials desperate for change are weighing a controversial but inventive way to fix troubled mortgages: Condemn them.
http://jlne.ws/Q1Hkh8

Banks & Brokers

JPMorgan’s $4.4 Billion CIO Loss Drives Profit Down 9 Percent
By Dawn Kopecki – Bloomberg
JPMorgan Chase & Co., the largest U.S. bank, reported a $4.4 billion trading loss in its chief investment office, bigger than analysts estimated, that helped drive second-quarter profit down 9 percent.
http://jlne.ws/Q1Hnth

JPMorgan Restates First-Quarter Earnings on ‘Integrity’ of Marks
By David Scheer – Bloomberg
JPMorgan Chase & Co., the largest U.S. bank by assets, restated first-quarter results to reduce net income by $459 million after a review of the firm’s chief investment office found that employees may have hid losses.
http://jlne.ws/Q1Hntk

JPMorgan: Top execs in bad trade dismissed
Associated Press via Yahoo! News
JPMorgan Chase says top managers tied to its highly publicized trading blunder have been dismissed without severance pay. The bank says it’s taking back two years’ pay from those officials.
http://jlne.ws/Q1Hkhd

JPMorgan Claim of Possible Trader Intent May Help U.S., Bank
By Matthew Leising and Patricia Hurtado – Bloomberg
JPMorgan Chase & Co.’s announcement that an internal inquiry may show “intent” to misprice trades in a unit that lost $5.8 billion may help a U.S. investigation while putting distance between management and any wrongdoers.
http://jlne.ws/Q1Hnto

JPMorgan Blaming Marks on Traders Baffles Ex-Employees
Bloomberg
JPMorgan Chase & Co. ’s assertion that traders at its London chief investment office may have intentionally mismarked trades, masking losses that total at least $5.8 billion, makes little sense, according to former executives with direct knowledge of the unit’s operation.
http://jlne.ws/Q1Hntp

Ohio Files Motion to Lead JPMorgan ‘Whale’ Fraud Suit
Bloomberg
Ohio Attorney General Mike DeWine filed a motion seeking to lead a proposed class-action lawsuit against JPMorgan Chase & Co. (JPM) involving the activities of a U.K. trader known as the “London Whale.”
http://jlne.ws/Q1Hntq

Jamie Dimon’s Quandary: Now That JPM’s Internal Hedge Fund Is Gone, Where Will 25% Of Net Income Come From?
Zero Hedge
Much has been said about JPM’s CIO Loss. And with the so called final number out of the way, investors in JPM have breathed a sigh of relief and are stepping back into the company hopeful that a major wildcard about the firm’s future has been removed.
http://jlne.ws/Q1HnJG

Deutsche Bank Seeks Leniency in Libor Scandal
Dow Jones
Deutsche Bank AG has approached the European Commission and the Swiss authorities offering to co-operate on investigations into alleged fixing of key global interest rate Libor in return for leniency, according to an article published on Der Spiegel’s website Sunday.
http://jlne.ws/Q1Hkxy

Citigroup aims to restore dividend hikes by 2013
Associated Press via Yahoo! Finance
Citigroup Inc. is aiming to hike its dividend for the first time since the 2008 financial crisis. The bank’s CEO Vikram Pandit said he expects to start discussing returning some cash to investors by the end of the year.
http://jlne.ws/Q1Hkxz

Knight Appoints Ana Concejero Managing Director, Listed Derivatives Sales in Europe, the Middle East and Africa
PR Newswire via Yahoo! Finance
Knight Capital Group, Inc. today announced that Ana Concejero joined Knight’s Listed Derivatives Group as Managing Director responsible for sales in Europe, the Middle East and Africa (EMEA), based in London.
http://jlne.ws/Q1HnJJ

Goldman Sachs to Set Up Office in Perth
Wall Street Journal Blogs
Goldman Sachs is going west as the investment bank plans to open a permanent office in Western Australia’s state capital Perth.
http://jlne.ws/Q1HkxD

Goldman Sachs and a Sale Gone Horribly Awry
New York Times
What does a financial giant owe to its clients? That question is at the heart of the battle between the founders of Dragon Systems and Goldman Sachs, their banker, in a sale that went horribly awry.
http://jlne.ws/Q1HnJP

Morgan Stanley, Bank of America Reduce Spreads on $1.35 Billion CMBS
Dow Jones
Morgan Stanley and Bank of America Merrill Lynch on Friday cut risk premiums on $1.35 billion in commercial mortgage-backed securities they are issuing as the deal neared official pricing, according to an investor familiar with the offering.
http://jlne.ws/Q1HkxN

Morgan Stanley Credit Trader Adam Jones Said to Leave
Bloomberg
Morgan Stanley senior credit- derivatives trader Adam Jones left the bank amid reductions in his division, said people briefed on the decision.
http://jlne.ws/Q1HkO2

Credit Suisse sees no material impact from Libor probe
Reuters via Yahoo! News
Credit Suisse Group AG does not expect a “material” impact from a wide-ranging regulatory probe into allegations of interest rate rigging, which also includes Swiss rival UBS AG as well as many other global banks.
http://jlne.ws/Q1HkO6

Bank Of England Correspondence With The Federal Reserve Bank Of New York And British Bankers’ Association In Relation To Libor
http://jlne.ws/Q1HkO9

Goldman Sachs Declares Preferred Stock Dividends
http://jlne.ws/Q1Ho0h

Clearing & Settlement

CME Group Clearing Advisory
3rd Quarter 2012 Eligible Stocks (Data from April 2, 2012 thru June 29, 2012)
http://jlne.ws/Q1HkOc

CME Clearing – New Product Advisory
Urea (Granular) FOB Egypt Swap/Urea (Prilled Bulk) FOB Yuzhny Swap Contracts
http://jlne.ws/Q1Ho0o

CME Clearing – Performance Bonds / Margins
Performance Bond Requirements – NYMEX New Products – Effective Friday, July 13, 2012
http://jlne.ws/Q1Ho0q

Indexes & Products

IndexIQ Plans To Close SKOR And Launch Bond ETFs, USCF Files For Currency ETF
http://jlne.ws/Q1Ho0t

ETF Liquidity: Thinly Traded ETFs Are Not So Bad
International Business Times
A common argument against exchange-traded products over the past several years has been a lack of liquidity slack trading volumes.
http://jlne.ws/Q1Ho0u

Kraft Foods Inc. to Join the NASDAQ-100 Index Beginning July 23, 2012
http://jlne.ws/Q1HogM

S&P Dow Jones Indices Announces Quarterly Index Reviews
http://jlne.ws/Q1HogN

Technology

CEGH Selects Trayport’s Globalvision Exchange Trading System
http://jlne.ws/Q1Hl4G

Exegy Launches Journal & Replay Product
http://jlne.ws/Q1Hl4H

Enforcement

FSA freezes assets of suspected land banking firm
Following a High Court order made on 13 July 2012, the Financial Services Authority (FSA) can now report that on 13 June 2012 it secured asset freezing orders against Asset L.I. Inc. (trading as Asset Land Worldwide), Equity Services (London) Limited, and Asset Land Investment PLC.
http://jlne.ws/Q1HogZ

Ex-Citi banker faces trial over CDO sale
By Kara Scannell in New York – Financial Times
US regulators will on Monday face their first courtroom test in a case involving an individual banker accused of misleading buyers of a mortgage-related product at the start of the financial crisis.
http://jlne.ws/Q1Hoh0

Environmental & Energy

U.S. Coal Rules May Allow State CO2 Markets: Forrister
Bloomberg
The U.S. may allow states to regulate emissions from existing coal-fired power plants using carbon markets, according to the president of the International Emissions Trading Association.
http://jlne.ws/Mrldvo

**RKB — Power utilities didn’t want a patchwork of 50 carbon-reduction programs, “but that may be happening.” says Forrister, in this article. Of course, how any emissions program – market-based or otherwise — moves ahead depends on who’s in the White House.

RGGI Update: Regional Cap-and-Trade Program Survives New York Challenge But Faces Others
Environmental News Network
The Regional Greenhouse Gas Initiative (RGGI) — a cap-and-trade program designed to limit power plant emissions in 10 Northeastern states — has been under close scrutiny in recent months as a result of lawsuits in New Jersey and New York, and legislation in New Hampshire. Each of these developments demonstrates the polarization and controversy that continue to surround greenhouse gas regulation, and RGGI in particular, years after the regional trading program first took effect.
http://jlne.ws/NI6T3h

**RKB — This is largely a quick rehash of RGGI’s steps forward and back in recent months. See story below for a different take.

Cap and Trade Resurrected? Some States Awaken to Its Economic Benefits
Inside Climate News
Evidence showing that cap and trade can bolster a new revenue stream has some state and federal officials quietly seeking answers.
http://jlne.ws/Ljsta6

**RKB – A handful of states, mostly in the Midwest but also in the deep South, have contacted RGGI officials about cap and trade, says Collin O’Mara, RGGI chairman and secretary of the Delaware Department of Natural Resources and Environmental Control.

Asia-Pacific

China eases taxes for foreign companies
By Paul J Davies in Hong Kong – Financial Times
China will cut taxes on the profits that foreign companies take out of the country by up to 50 per cent after rules on withholding taxes were relaxed to encourage more overseas investment.
http://jlne.ws/Q1Hoxg

Wen Warns China’s Not Fixed Yet
By TOM ORLIK – WSJ
In the U.S., the markets hang on the every word of Federal Reserve Chairman Ben Bernanke. In China, that role is played by Premier Wen Jiabao—and he sounds a little worried.
http://jlne.ws/Q1Hl4K

Analysis: China policy chiefs swallow hard in growth boost bid
Reuters via Yahoo! News
BEIJING – China’s government is engaged in the economic equivalent of holding its nose and swallowing nasty medicine, dosing up on investment spending, local government debt and real estate sales to push up growth.
http://jlne.ws/Q1Hoxj

With slower growth, China can’t play economic hero
AP
China’s economic growth fell to a three-year low, and a potential recovery later this year will probably be too weak to pull the world out of its slump.
http://jlne.ws/Q1Hl4N

Press Conference By Tadahiro Matsushita, Japan’s Minister For Financial Services – Insider Trading And Merger of Tokyo And Osaka Bourses
http://jlne.ws/Q1Hl4O

SGX extends India access with 16 July Nifty Options launch
Singapore Exchange (SGX) is offering SGX S&P CNX Nifty Options from 16 July 2012.
http://jlne.ws/NqeyCj

HKFE Announces Revised Margins For China Construction Bank Futures
http://jlne.ws/Q1Hoxm

Tokyo Stock Exchange: Production Release Of Performance Enhancement
http://jlne.ws/Q1Hl4P

Hong Kong’s Securities And Futures Commission: Court Sentences Two Market Manipulators To Serve Community Service Orders
http://jlne.ws/Q1Hoxr

HKEx Renews Contract Of Its Head Of Listing, Mark Dickens
http://jlne.ws/Q1Hoxu

Dalian Commodity Exchange Tests Coking Coal Futures Trading In Full Scope
http://jlne.ws/Q1HqFo

Frontier Markets

DGCX Named ‘Best Global Commodities Exchange’ In 2012 At The Global Banking & Finance Review Awards 2012
Dubai Gold and Commodities Exchange (DGCX) has been named the ‘Best Global Commodities Exchange’ by the Global Banking & Finance Review. The award recognises DGCX’s exceptional trade volume expansion and product innovation during the last year. The annual Global Banking and Finance Review Awards recognise achievement, challenge, progress and inspirational change in the global financial industry.
http://jlne.ws/Q1HqFq

Egyptian Exchange Market Hours During Ramadan
http://jlne.ws/Q1HoNN

Malawi Stock Exchange Weekly Trading Report- 13th July,2012
Please click
http://jlne.ws/Q1HqFv

MCX Weekly Market Report July 06, 2012 – July 12, 2012
http://jlne.ws/Q1HqFy

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