Singapore Exchange places its first listing on its new dual-currency trading platform. JPMorgan looks to sell off a range of its electricity deals as more attention is paid to banks and commodity trading. Exchange CBOE looks for a purchase agreement for ConvergEx’s options technology subsidiary LiquidPoint.
Eighteen Years Later
Eighteen years ago today, I received a call right after the S&Ps closed. It was my wife, my very pregnant wife. Her water had broken and she patiently waited for the stock index futures to close before calling her futures broker husband to tell him this news.
“You need to come home NOW,” she said. “We need to go to the doctor’s office.”
I did not say goodbye, I just flew out of the office. I ran to the train and grabbed the 3:40 p.m. home.
Our child was on his way, but he was breech. We had to head to the hospital for emergency surgery for a Caesarean Section.
I watched behind a curtain which was way too short to block my view. My son Tim came into this world right before my eyes, butt first. His very first act was to moon the doctor.
Today, my brokerage days are done and Tim is working for me as an intern in my media business, participating in our Intern Education Series and learning lots about the markets and the people in them. In a few weeks, he will be headed to college to study journalism.
But today, on his eighteenth birthday, lots of things change. He can vote in elections. He can be arrested as an adult. He can buy lottery tickets. He can stay out after curfew. He can serve in the military. He can get married. He can have his own bank account. He can smoke and buy tobacco and so much more.
His life changes at 18. He is no longer a youth in Boy Scouts. He can’t ever wear the uniform unless he joins a Venture Crew or becomes an adult leader.
My life changes too. I now have another adult in the house, at least for a few weeks.
It is amazing how quickly it all happened. It seems just like yesterday that I was a futures broker with my very first desktop computer, a Windows 95 machine. Emini S&Ps had yet to be invented and electronic trading was in its infancy.
Today, electronic trading has grown up. Tim has also grown up. And now that I am not a broker anymore, my wife does not have to wait until after the end of the day’s trading session to call me with news.
CBOE plans to buy options tech provider LiquidPoint from ConvergEx
Lynne Marek July 25, 2013 – Crain’s Chicago Business
CBOE Holdings Inc., the biggest U.S. options exchange, plans to acquire the LiquidPoint LLC options technology unit of ConvergEx Group LLC, Crain’s has learned. The deal isn’t complete — the price appears to be still up in the air — but the acquisition would be CBOE’s first of an independent technology provider.
***** The question I had was will CBOE under its new CEO be a wolf or a sheep. Today, they It looks like they want to be a wolf.
NYSE Euronext joins the UN Sustainable Stock Exchange Initiative
NYSE Euronext today announced that it has joined the United Nations’ Sustainable Stock Exchanges (SSE) initiative, which aims to explore how exchanges can work together with investors, regulators, and companies to enhance corporate transparency on Environmental, Social and Corporate Governance (ESG) issues and encourage responsible long-term approaches to investment.
***** NYSE rocks!
Bell Rock Adds to Hedge Fund Governance Team
Bell Rock is pleased to announce the appointment of Zach Ziliak to its independent director services team, as it expands its fund governance practice for investment funds. http://jlne.ws/11fOTEK
***DA: Zach, a quant-turned-attorney, wrote several commentaries for MarketsReformWiki and was one of our featured speakers in the Restoring Customer Confidence video series
Old-Fashioned Regulators Miss What’s New in Finance
Is the financial system any safer now than in 2008? There’s been some progress but less than you might think. I argued last week that regulators should put in place much tougher bank capital requirements than planned, for instance, and step up efforts to segregate different kinds of financial business to suppress contagion.
***** How about the brain drain from the regulators as a result of the 80 hour work weeks to get Dodd-Frank rules created and the opportunities to take that knowledge and move to the private sector with it? How much intellectual capital has been lost from the regulators?
FOA Members’ Vote Paves The Way For Affiliation With FIA
Members of the Futures and Options Association (FOA) voted yesterday in support of a special resolution to adopt new articles of association which pave the way for the affiliation of the Association with the Futures Industry Association (FIA) under one global structure and brand called FIA Global, and the change of name to FIA Europe.
***** FIA Global needs some really good marketing.
FIA Statement On FOA Member Vote
The Futures Industry Association issued the following statement from FIA President and Chief Executive Officer Walt Lukken regarding the vote by the membership of the Futures and Options Association in favor of the proposed affiliation with FIA:
***** I don’t remember getting my ballot. I am an associate member. What is this, membership dues without representation? Not very catchy, but it will do.
The Bermuda Triangle of Punditry
How do we reconcile the incentive for pundits to not stray from the consensus – and thus minimize career risk – with the bombastic pundits that we all love to rail on? Why aren’t they concerned about career risk? Well, here’s the catch: In punditry, if you are going to be wrong, it pays to be spectacularly wrong. We explain using the following matrix:
***JM: Very nice – have wanted to see this for ages. Reality and track records are unpleasant cold showers, which most folks avoid when possible, but I really hope it takes off. It’s on my “follow” list.
Asic implements new market surveillance system – Greg Yanco interview
Justin Lee – Risk.net
The Australian Securities and Investments Commission (Asic) is upgrading its market surveillance system to target insider trading and market manipulation as part of a A$43 million ($40 million) mandate, announced in December 2012. Due to be implemented in August this year, the new surveillance system will provide a greater capability to monitor all types of trading across markets as well as across different products. The system will also incorporate data analytics tools that will allow for the analysis of complex data sets and the ability to identify patterns and relationships in post-trade data.
***** It uses the latest in spreadsheets too.
London is poised to overtake Chicago as the world’s second most important hub for colocated financial services as the need for greater asset-class and geographical diversity drives demand for proximity hosting services, according to findings from Automated Trader’s annual survey of global trends.
***** Chicago will not move over. It very much likes where it is next to Lake Michigan, right in the center of the country and connected by lots of train tracks, fiber and coming soon even faster connectivity tools.
MarketsWiki Recent Updates
Companies, Organizations and Groups
42,041,065 pages viewed, 7,602 articles, 162,457 edits
First RMB Shares To Start Trading On SGX
Singapore Exchange (SGX) is pleased to announce that Yangzijiang Shipbuilding (Holdings) Ltd will be the first company to have trading of its shares in Chinese Renminbi (RMB) on SGX’s dual currency trading platform. Yangzijiang’s RMB-denominated shares will start trading on 5 August.
New York Probes Bloomberg Reporters’ Access to Information
KATY BURNE – WSJ.com
New York Attorney General Eric Schneiderman’s office is looking into how much access Bloomberg LP news reporters may have had to information about the media and technology company’s customers, said people familiar with the inquiries.
JPMorgan’s commodity arm eyes sale of power plant trading deals
David Sheppard and Scott DiSavino | Reuters
JPMorgan Chase & Co’s commodity trading arm is looking to sell more of the electricity deals it has with U.S. power plants and wind farms, a source familiar with the business said on Wednesday, at a time when Wall Street’s involvement in physical commodity markets is under heightened scrutiny.
Pension funds cannot jump creditor queue in bankruptcy – court
Reuters via Yahoo! News
By Sarah Mortimer LONDON – Pension scheme members cannot jump ahead of other creditors when a company or bank goes bust, the Supreme Court said on Wednesday in a landmark ruling that clarifies the ranking of creditors in an insolvency.
Has Europe Caught the Good-News-is-Bad-News Bug?
Martin Essex – MoneyBeat – WSJ
Not for the first time, prices in the financial markets seem to have moved perversely on Thursday morning given a raft of healthier economic data. The German business climate improved, Italian consumer confidence was higher, Spanish unemployment was down and the U.K. economy grew at twice the rate in the second quarter as in the first. Yet European stock prices are lower, the euro is below its levels in New York late Wednesday, and oil and gold prices are down too.
Anti-money laundering – Financial Conduct Authority
This report sets out our obligations relating to anti-money laundering, our approach to carrying out those obligations, and the trends and emerging risks in money laundering that we are seeing in the firms we regulate.
SEC’s Conflict-Mineral Rule Upheld in Big Blow to Business
Major business groups had sued in an effort to block the reporting rule, which they said might cost as much as $16 billion to implement.
[FCA] Retail Distribution Review six months in – how firms are implementing the RDR
[FCA] Supervising retail investment advice: how firms are implementing the RDR
Exchanges & Trading Facilities
NASDAQ OMX Reports Second Quarter 2013 Results
The NASDAQ OMX Group, Inc. today reported results for the second quarter of 2013. Second quarter net revenues were $451 million, up from $416 million in the prior year period on a non-GAAP basis, driven by acquisitions and organic growth in all four business segments. On an organic basis second quarter net revenues increased 1% year-over-year.
Thomson Reuters Adds 65 Global Futures Connections
Zarna Patel – Wall Street & Technology
Thomson Reuters has added 65 futures commission merchant (FCM) connections to its Autex Trade Route through a direct market access platform for global futures market provided by CQG Continuum. The CQG platform allow customers using Autex to obtain expanded access to global futures exchanges.
MarketAxess Benefits From Tie-Up With BlackRock’s Aladdin, Posts Record Revenues
Katy Burne – MoneyBeat – WSJ
MarketAxess Holdings Inc. completed phase one of its integration with a bond trading system run by BlackRock Inc. in recent weeks, its chief executive said Wednesday, as the company announced record quarterly revenues.
NYSE Group Inc. Issues Short Interest Report
NASDAQ Announces Mid-month Open Short Interest Positions In NASDAQ Stocks As Of Settlement Date July 15, 2013
Direct Edge Trading Notice #13-32: Limit Up-Limit Down Saturday Test
Moscow Exchange: Results Of Auction For Placement Of The Russian Federation Government Bonds, Issue No25082RMFS
Moscow Exchange Introduces New High Frequency Market Data Service For Derivatives Traders
Starting from 23 July, a new ultra low latency data feed for is available for co-location users connected to the Derivatives market through the M1 Data Center.
Hedge Funds & Managed Futures
Fincad Taps Cloud Power for Real-Time Risk Analytics
Faye Kilburn – WatersTechnology
Canadian derivatives valuation and risk management software provider Fincad is making a number of compute and capacity enhancements to its F3 analysis platform, to support more complex pricing and analytics requirements among buy- and sell-side firms — which use the platform to price and perform risk calculations for derivatives — to meet the demands of new regulations, such as Dodd Frank and Basel III.
BlackRock says executive rejected RBS approach
BlackRock Inc said its head of Asia Pacific operations, Mark McCombe, spurned an approach regarding the role of chief executive at Royal Bank of Scotland and will remain with the world’s largest fund manager.
Bruised And Battered Legg Mason Poised For A Comeback
Halah Touryalai, Forbes Staff
It’s been a brutal few years for Legg Mason but there may be some hope for the battered asset management company. Hope comes in the form of Joseph Sullivan, the new CEO who took the job in February.
Hedge funds most bearish on Treasurys in 16 months
Hedge fund managers are the most bearish on their outlook for 10-year U.S. Treasurys in 16 months, according to a new survey, as they position for a winding down of the Federal Reserve’s bond buying program.
Asset manager Janus Capital profit falls 32 pct
Asset manager Janus Capital Group Inc reported a 32 percent fall in second-quarter profit as customers withdrew money from its mutual funds.
Banks & Brokers
RBS weighs idea for its investment banking unit
Patrick Jenkins, Banking Editor – FT.com
Royal Bank of Scotland is shaping up for another radical restructuring as the majority state-owned bank wrestles with the challenge of finding a new chief executive.
ETrade seeking to sell Chicago market-making unit
Lynne Marek – Crain’s Chicago Business
ETrade Financial Corp., the online stock brokerage that has adjusted under a string of CEOs in recent years, said today it is trying to sell its Chicago-based market-making unit, G1 Execution Services LLC. New York-based ETrade classified the G1 unit as “held-for-sale” during the second quarter, according to an ETrade statement announcing second-quarter results. The company also said in the release that it “decided to exit its market-making business.”
Credit Suisse Profit Rises 33%
JOHN LETZING – WSJ.com
Credit Suisse Group AG on Thursday posted a 33% gain in profit, as it cut costs and continued to see positive signs from its scaled-down investment bank.
Tradition looks to cost cutting to combat falling revenues
Anish Puaar – Financial News
Swiss interdealer broker Compagnie Financière Tradition has reported a drop in revenues in the first half of 2013 from the same period last year, but has said cost cutting measures put in place last year are beginning to pay off.
Spectre of ABN Amro returns to haunt RBS
Vivek Ahuja – Financial News
Royal Bank of Scotland’s disastrous takeover of ABN Amro in October 2007, widely blamed as the chief reason for the UK bank’s need to be bailed out the following year, has reared its head again, after RBS was today fined a record amount by the Financial Conduct Authority for trade reporting failures.
Bank of America Adds to Board
SHAYNDI RAICE – WSJ.com
Bank of America Corp. Wednesday said two former banking-industry executives would join its board, a sign the bank is beefing up its financial-services expertise.
Morgan Stanley Schedules Semi-Annual Fixed Income Conference Call
Clearing & Settlement
DTCC buys Thomson Reuters stake in Omgeo
Philip Stafford – FT.com
The Depository Trust & Clearing Corporation (DTCC) is to buy out the 50 per cent it does not own of Omgeo, a post-trade services provider, from Thomson Reuters as it extends its push into risk analysis. DTCC, which is owned by a collection of banks, said on Wednesday it hoped full ownership of Omgeo would increase the use of the subsidiary’s technology by investment managers, broker-dealers and custodian banks.
CMEGroup – COMEX Options Expiration Operational Procedures for the Trading Floor and Clearing Members (HX, OG, SO) Effective Thursday, July 25, 2013
Indexes & Products
ETF Liquidity: Look Beyond Trading Volume
ETF Trends via Yahoo! Finance
When looking at a stock, most investors will look at the trading volume as an indicator of liquidity. However, the same principle doesn’t exactly apply to exchange traded funds. An ETF is comprised of tens, hundreds or thousands of individual component securities. Consequently, an ETF’s true liquidity is based on the liquidity of its underlying holdings.
Yodlee Is Powering Your Financial Apps, and Banks Love It
Becca Lipman – Wall Street & Technology
You may not know about Yodlee, but the odds are high you use one or more of their platform services. Their personal asset management tools are used by the biggest banks all the way down to micro firms to help aggregate financial information.
KVH Launches VPN Service KVH Netxpress To Enable Connectivity To Multiple Environments, Including Cloud Services
SunGard To Annouce Second Quarter 2013 Results On August 2, 2013
‘Fabulous Fab’ takes to witness stand
Tracy Alloway in New York – FT.com
Fabrice Tourre, the former Goldman Sachs banker accused of defrauding investors in a complex mortgage bond known as Abacus, on Wednesday took to the witness stand to defend himself for the first time in court.
In Case Against SAC Capital, a Show of Force
BEN PROTESS and PETER LATTMAN – NYTimes.com
When Steven A. Cohen’s lawyers arrived for a meeting this spring at the United States attorney’s offices in Lower Manhattan, in a Brutalist-style building tucked behind a pair of courthouses, the conference room was so packed with federal investigators that one official had to venture down the hall for additional chairs.
Trader and S.E.C. Lawyer Spar Over E-Mail
SUSANNE CRAIG – NYTimes.com
The Securities and Exchange Commission waited more than three years to have a chance to shred the credibility of Fabrice Tourre, a former Goldman Sachs trader, in front of a jury. It finally got its chance on Wednesday.
SEC judge in Cohen case no stranger to high-profile cases
The Securities and Exchange Commission judge who will oversee the agency’s administrative trial against hedge fund tycoon Steven A. Cohen has a history of presiding over high-profile and thorny cases.
Former UBS Bankers Get Prison Terms for Muni Bid-Rigging
New York Times
Three former UBS AG bankers were sentenced to prison on Wednesday for deceiving U.S. municipalities by rigging bids to invest municipal bond proceeds, with the longest sentence at 27 months, a fraction of what prosecutors had sought.
[AMF Canada] Matter of Alain Péloquin – Notice of hearing
[AMF Canada] Illegal practice as a dealer – Éric Landry pleads guilty
Environmental & Energy
Trading Halt Shows UN Carbon System in Jeopardy: Energy Markets
An unprecedented freeze in United Nations carbon trading is fanning speculation the five-year-old market designed to combat greenhouse-gas emissions in poor countries is in danger of becoming superfluous.
PEGAS: EEX to migrate Natural Gas Spot Markets on 28 August
The European Energy Exchange (EEX) continues to migrate its Natural Gas products onto PEGAS, the common gas trading platform of EEX and Powernext. Once the migration of the Spot Market products for GASPOOL, NCG and TTF scheduled on 28 August 2013 is complete, the full range of EEX and Powernext products will be tradable on PEGAS.
Arctic methane release could cost economy $60 trillion -study
A release of methane in the Arctic could speed the melting of sea ice and climate change with a cost to the global economy of up to $60 trillion over coming decades, according to a paper published in the journal Nature.
China grants HSBC an onshore renminbi trade licence
Josh Noble in Hong Kong – FT.com
HSBC has received approval from mainland Chinese regulators to invest renminbi onshore, the latest step in the opening up of China’s financial markets to overseas funds.
HKEx To Introduce CES 120 Futures On 12 August
Hong Kong Exchanges and Clearing Limited (HKEx) will start trading CES China 120 Index (CES 120) futures on Monday, 12 August 2013, as it continues to expand its suite of Mainland China-related products.
EDHEC-Risk Institute Unveils Major Scholarship Programme For Asia-Pacific
To support the build-up of a strong, home-grown cohort of financial sector and capital market leaders within ASEAN countries and the wider Asia-Pacific region, EDHEC Risk Institute–Asia is creating a scholarship scheme aimed at facilitating the participation of outstanding professionals in the executive track of its doctoral programme in Singapore.
Notice Regarding Judgment In Litigation Against Tokyo Stock Exchange, Inc.
Yesterday, the Tokyo High Court issued a judgment in the appeal for compensation of damages filed by Mizuho Securities Co., Ltd. against Tokyo Stock Exchange, Inc., as follows.
SGX welcomes SPH REIT to Mainboard
BSE to refund 90 per cent of membership deposit
Palak Shah – Economic Times
BSE, the country’s oldest bourse, has decided to refund 90% of the amount it raised as membership deposit from stockbrokers, bowing to pressure from many of its old members. The move, which will benefit about 200 brokers, will cost the exchange Rs 150-180 crore.
Tide Turns for Private Equity in India
Kenan Machado – MoneyBeat – WSJ
The rupee’s slump to a record low is adding to the woes of foreign private-equity firms invested in India even as they deal with slowing economic growth and a big drop in initial public offerings this year.
ISA chief seeks to oust TASE chairman
Israel Securities Authority (ISA) chairman Shmuel Hauser is determined to replace the senior management of the Tel Aviv Stock Exchange (TASE).