Australia’s stock exchange goes on a capital-raising mission. NYSE Euronext picks a CEO for their new EnterNext venture. Regulatory reform in Europe is said to have hit a roadblock as underfunded regulators and industry opposition takes its toll.

First Read

CME primed for new derivatives rules
Neil Munshi, Philip Stafford and Michael Mackenzie –
CME Group, the world’s largest futures exchange operator, is leading a group of US exchanges hoping to take full advantage of the next phase of new US rules tightening up derivatives trading, which came into force on Monday.

***** Primed and ready.


CBOE will keep policing its own markets, new chief says
John McCrank – Reuters
CBOE Holdings Inc, whose regulatory programs have been subject to a federal probe, is not giving up the job of policing its own markets, nor is it leaning toward splitting off its regulatory unit, the options exchange’s new CEO said Friday.

***** Self regulation is a feature of the open outcry markets Mr. Tilly came from.


Chasing Alpha With Your Hands Tied Behind Your Back
Ed Lopez – TABB Forum
Equilibrium of front-office efficiency and control is important to avoid risks and losses. But the raison d’être of portfolio managers and traders alike is ultimately to grow assets and make money for the firm. How can front-office staff be effectively supported in this quest while keeping regulators satisfied and being compliant?

***** I just don’t like this headline.


CME Group Announces Daily Trading Volume Record in NYMEX Brent (BZ) Crude Oil Futures
CME Group, the world’s leading and most diverse derivatives marketplace, announced it reached a trading volume record for its NYMEX Brent (BZ) crude oil futures contract on Friday, June 7, 2013. Trading volume for NYMEX Brent reached 52,352, compared to April 12, 2013, the last record day, when volume reached 44,357 contracts.

***** Brent and Broken.


[Video] High Frequency Trading Falls on Hard Times
Bloomberg Businessweek’s Matthew Philips and Steve Ehrlich, former CEO at Lightspeed Financial, discuss the current state of high frequency trading and how traders became the victims of their own success. They speak on Bloomberg Television’s “Bloomberg Surveillance.”

*****You have to play this in slow motion to understand it.


NFA’s Board welcomes 4 swap participant members
Last August, the Board unanimously voted to ratify a proposal to amend NFA‘s Articles of Incorporation to increase the size and modify the structure of the Board to integrate swap dealer and major swap participant Members into NFA’s governance structure. The amended Articles increase the Board’s size by adding seven swap participants to the Board.

*****But what if the swaps participants are trading futures? Swap futures?


Turnkey Trading Partners Named Best North American Regulatory Advisory Firm
Turnkey Trading Partners is proud to announce that it’s been voted “Best North American Regulatory Advisory Firm,” by Hedgeweek magazine. Hedgeweek’s fourth-annual Global and USA Awards recognize excellence among hedge fund managers and service providers around the world.

***DA: For more on Turnkey, check out last year’s interview with founder James Bibbings


What’s behind the remarkable growth of DGCX?
Galen Stops – FOW
2012 was a year that most derivatives exchanges would rather forget. But for the Dubai Gold and Commodities Exchange it was the best year ever as volumes grew 138%. The Dubai Gold and Commodities Exchange was founded in 2005 and had been growing steadily, if not spectacularly, until the beginning of 2011. That year it more than doubled the 2010 volumes, but with 4m contracts traded for the year, it was still a small exchange.

***** Has it hit the tipping point?


Major Clearing Brokers Announce Support for the ISDA Clearing Connectivity Standard in Accordance with June 10(th) Clearing Deadline
The International Swaps and Derivatives Association, Inc., and Sapient Global Markets, a division of Sapient, today announced that four of the largest over-the-counter derivatives clearing brokers (known in the U.S. as Futures Commission Merchants, or FCMs) have confirmed their support for the Clearing Connectivity Standard initiative to standardize reporting for cleared OTC derivatives.


GuavaTech Inc. Announces CBOE Futures Exchange Hosting and Connectivity Access at London LD4 Co-Location Facility
GuavaTech, Inc., a leading managed service provider specializing in customized IT solutions for proprietary trading firms, investment banks, hedge funds, broker/dealers, and FCMs, today announced that it will begin offering proximity hosting and ultra-low latency connectivity solutions for CBOE Futures Exchange (CFE) at the LD4 data center located in London, UK. GuavaTech now provides CFE with market data access and co-location services at LD4. This connectivity to the CFE Enhanced (CSM) market data feed and the Unicast trading feed now offers European traders the ability to access all CFE quotes and trades, including spreads. In addition, CFE has installed fee waivers through the end of 2013 to enable low-cost entry through the LD4 co-location facility.
(via email)


Artisan crafts a winning formula
Mike Foster
Things are not quite what they seem at Artisan Partners, the US equity manager which secured a stock market listing on the New York Stock Exchange in March. Rather than a single outfit, it is a federation of five independent affiliates. Groupthink is forbidden and central macroeconomic viewpoints are barred. The recipe works.


NYSE Liffe Commodity Derivatives Cocktail Reception and Educational Event
As a kickoff to next week’s Global Grain Chicago conference, NYSE Liffe will be hosting a cocktail reception and educational event in the Metropolitan Club, 66th floor of the legendary Willis Tower. Keynote speakers include Dan Basse, President of AgResource and Michel Portier, General Director of Agritel. As an added bonus, attendees will be given VIP access to Skydeck Chicago, located on the 103rd floor. If you have any questions, or would like to register for the event, please contact Dayre Lashnits at
(via email)

Jock Percy

Jock Percy of Perseus Telecom on Microwave Technology in the Trading World

Jock Percy spoke with John Lothian News Editor-at-Large Doug Ashburn about the use of microwave for data transmission – what is driving the demand, the benefits and limitations of wireless, and a bit about the economics of technology upgrades. He closes with a look to the future of wireless and its global implications.

Dr. Jock Percy is CEO of Perseus Telecom, a global carrier of financial telecommunications specializing in ultra low-latency market-to-market connectivity. Before taking the helm at Perseus, Percy spent a number of years in the telecommunications sector, with firms such as Double Helix (sold to ACE*COMM in 2006), BT, Telekom Austria, Finnet, and Saudi Telecom. In 2009 he founded FXecosystem, a provider of low-latency infrastructure to the foreign exchange market.

Watch the video »


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Lead Stories

ASX plans rights issue to meet new capital rules
Neil Hume in Sydney –
The Australian Securities Exchange has surprised analysts by announcing plans to raise more than A$500m, saying it needs the money to comply with new capital rules affecting clearing houses, repay debt and fund “growth initiatives”.

NYSE Euronext appoints Eric Forest as Chairman and CEO of EnterNext
NYSE Euronext (NYX) today announced the appointment of Eric Forest as Chairman and CEO of EnterNext, the marketplace for SMEs. He will join NYSE Euronext in a few weeks and is already present alongside Dominique Cerutti, NYSE Euronext President and Deputy CEO and Chairman of the Management Board of Euronext NV, for the first stages of the regional launch, in Marseille and Lyon.

European swaps reporting deadline facing further delays
Anish Puaar – Financial News
Under-resourced regulators and industry resistance could push key European derivatives reporting rules well into 2014, further delaying Europe’s implementation of G20 reforms that will reshape the swaps market.

Want to Commit Insider Trading? Here’s How Not to Do It
New York Times
A person in Thailand, who has been accused of insider trading related to Smithfield Foods, used quite a few techniques that were bound to attract the attention of regulators, the author writes.

More evidence that Thomson Reuters data may be leaking out earlier than it’s meant to
Quartz via Yahoo! Finance
High-frequency traders have a distinct advantage in the way Thomson Reuters distributes its University of Michigan Consumer Sentiment Index, a monthly report compiled by Thomson Reuters and the university.

Most Banks Expect Salary Increases to Offset EU Bonus Cap
The poll, of more than 150 human resources employees, found that only 7 percent thought the EU rules would be successful in reducing pay across the financial services industry. About 53 percent said they would increase pay.


CFTC Announces that Mandatory Clearing for Category 2 Entities Begins June 10
The second phase of required clearing for certain credit default swaps (CDS) and interest rate swaps begins today. Commodity pools, private funds, and persons predominantly engaged in activities that are in the business of banking, or in activities that are financial in nature, are included within the definition of Category 2 Entities. These entities are required to begin clearing swaps executed on or after June 10, 2013.

CFTC Provides For Mutual Acceptance of Approved Legal Entity Identifiers
The Commodity Futures Trading Commission (CFTC) has issued an Amended Order expanding, through mutual acceptance by international regulators, the list of Legal Entity Identifiers (LEIs) that can be used by registered entities and swap counterparties in complying with CFTC’s swap data reporting regulations.

CFTC’s Division of Clearing and Risk Issues Time-Limited No-Action Relief to Banks Having Assets of Less Than $10 Billion from the Board Approval Requirement of the CEA and the End-User Exception to the Clearing Requirement
The Division of Clearing and Risk (DCR) of the Commodity Futures Trading Commission (Commission) today announced the issuance of a time-limited, no-action letter granting relief to banks, savings associations, farm credit system institutions, and credit unions having assets of less than $10 billion (Small Banks), which are issuers of securities, from the board approval requirements of section 2(j) of the Commodity Exchange Act (CEA) and Commission regulation 50.50, subject to certain conditions.

The Commodity Futures Trading Commission’s (CFTC) Office of Consumer Outreach and the Securities & Exchange Commission’s Office of Investor Education and Advocacy are issuing this Investor Alert to warn about fraudulent schemes involving binary options and their trading platforms. These schemes allegedly include refusing to credit customer accounts, denying fund reimbursement, identity theft, and manipulation of software to generate losing trades.

AIFMD: Significantly higher costs for depositaries will outweigh advantages, say fund industry players
Polling sessions during Clearstream’s Fund Summit in Brussels revealed that 60 percent of the 150 delegates anticipate that the increase of costs for depositaries posed by the new AIFMD (Alternative Investment Fund Managers Directive) rules will be significant and will outweigh the advantages. On the alternative fund manager side, 56 percent of the delegates say AIFMD will significantly impact their operational, legal and/or governance model set-up.

Statement Between The U.S. And Japanese Authorities To Facilitate U.S. FATCA Implementation

ESMA Seeks New Members For Its Securities Markets Stakeholders Group

ESMA Risk Dashboard

ASIC consults on demutualisation approval procedure rules

Exchanges & Trading Facilities

NYSE Arca Unveils Exchange Traded Products Incentive Program
NYSE Euronext announced that it has received approval from the U.S. Securities and Exchange Commission to launch the NYSE Arca Exchange Traded Product Incentive Program. This new 12 month pilot program offers an alternative for incentivizing lead market makers to be the primary market maker in certain exchange traded products selected by issuers.

ISE Announces Three New Board Members
The International Securities Exchange (ISE) today announced the addition of three new members to its Board of Directors, and also announced six members were re-elected.

ICE chief ready to cede NYSE market share in bid to end rebates
John McCrank – Reuters
The New York Stock Exchange may cede some of its share in U.S. stocks in an effort to end large trading incentives after NYSE Euronext’s (NYX.N) $8.2 billion sale to IntercontinentalExchange (ICE.N) goes through, ICE’s chief executive said on Friday.

ASX Announces $553 Million Entitlement Offer

ASX Request for a Trading Halt
Trading halt requested pending the outcome of a proposed capital raising

ASX Cleansing Notice

[ASX] Appendix 3B

Liquidnet Sees Record Growth and Membership Engagement in Asia Pacific
Business Wire via Yahoo! Finance
Liquidnet, the global institutional trading network, reported a series of Asia Pacific trading records in May, including a record month of principal traded and the highest volume t

Vienna Stock Exchange Monthly Statistics – May 2013

Vienna Stock Exchange Monthly Statistics: Derivative Market – May 2013

BM&FBOVESPA: Decree N. 8,023 Reduced The Rate Of Tax On Credit, Exchange And Insurance On Foreign Investors’ FX Transactions

Hedge Funds & Managed Futures

Bond Buffer Seen in Demand for Swaps Collateral: Credit Markets
Matthew Leising & Liz Capo McCormick – Bloomberg
New collateral rules for hedge funds, insurers and others in the $633 trillion over-the-counter derivatives market are poised to boost demand for U.S. Treasuries, potentially slowing rising yields as the Federal Reserve considers scaling back unprecedented stimulus.

May Hedge Fund Performance Update: Ben Bernanke Keeps Crushing it
Zero Hedge
Yet another month in which the Ben Bernanke risk managed S&P500 Onshore Fund outperforms 93% of all other actively managed brand name hedge funds, and is on pace for the fifth year in a row in which the 2/20 world will underperform the S&P500.

SAC Capital Redemptions $2 to $3 Billion: Exclusive
CNBC via Yahoo! Finance
The hedge fund SAC Capital received between $2 billion and $3 billion in requests from investors for the return of capital last week, say people familiar with the matter.

US $87bn asset manager sets up in London
Sophie Baker – Financial News
Thornburg Investment Management has opened its first non-US office to enhance its global distribution capabilities and build on the international perspective it can offer to its increasingly globally-focused clients.

The Last Thing SAC Capital Needs — A Hedge Fund That Manages Some Of Its Money Is Getting Spanked
Business Insider
NEW YORK – As billionaire investor Steven A. Cohen deals with a spate of redemptions out of his own hedge fund, another firm in which his SAC Capital Advisors has money saw returns plummet in the first four months of the year.

Ten things investors are demanding in the current fundraising cycle
Alec Macfarlane – Financial News
In an environment where fundraising is proving difficult for private equity firms, investors are finding they have more negotiating power than ever before. But how this should be used is less clear. Here, Financial News rounds up the variety of investor concerns to list the top 10 demands they are currently making.

How To Be King Of The World — A Hedge Fund Manager Explains
Business Insider
I can totally dominate my 11 year old daughter in tennis. I kick her ass basically. Like, if she hits an easy shot, I can slam it back to the other side of the court and with her small legs there’s no way she can run to catch the ball.

Yes, Mothers Can Be Traders
Business Insider
According to Paul Tudor Jones, the billionaire hedge fund manager, they cannot. We find this statement both disturbing and perplexing since we are women whose life experience would suggest otherwise, and we spend much of our time encouraging young women to pursue careers in finance generally and trading in particular.

Pan-European Survey Highlights Achievement Across The Buy-Side, Sell-Side And Corporate Communities – Thomson Reuters Announces 2013 Extel Survey Results

Banks & Brokers

Lloyds accused of mishandling PPI complaints
Hannah Kuchler –
Lloyds Banking Group has admitted problems with the way it handled some PPI complaints after an undercover investigation claimed staff were told to ignore possible fraud.

Counting the real cost of regulation
William Wright – Financial News
Nobody likes more regulators or more regulation. This antipathy towards watchdogs was neatly captured by Howard Davies, then chairman of the Financial Services Authority, when, shortly after the organisation’s formal launch in 2001, he wrote: “The celebrations in the City of London were muted. If there were parties, we were not invited.”

Barclays fires back, says hostility to banks unhealthy
Reuters via Yahoo! Finance
Barclays PLC Chairman David Walker hit back on Monday against what he said has become the “political and media industry” of badmouthing banks and bankers, and insisted on banks’ vital role in a free-market economy.

Current Account: Nomura Not Scared by Its Ghosts
Francesco Guerrera – MoneyBeat – WSJ
The vast trading floor in Midtown Manhattan was eerily quiet when I visited a couple of weeks ago. The phones were dead and the screens dark. Silence filled the void usually occupied by the noisy banter of those buying and selling securities.

Nomura Adds 6 Bankers to Its Americas Arm
New York Times
Nomura of Japan said on Monday that it had hired several senior bankers to take various posts at its investment bank as the firm continued to expand its presence in the Americas.

Deutsche Bank says is confident on asset wealth management goals
Reuters via Yahoo! Finance
Deutsche Bank can achieve and possibly even exceed its target of generating 1.7 billion euros in pretax profit from its asset and wealth management division by 2015, the unit’s chief Michele Faissola said

Deloitte Buys Assets of Hugh McColl’s Boutique Bank
Deloitte announced on Monday that it had acquired most of the assets of McColl Partners, a boutique investment bank founded by Hugh L. McColl Jr., who had built Bank of America into a colossus. Terms of the deal were not disclosed.

Fraud Against Seniors Often Is Routed Through Banks
The pitch arrived, as so many do, with a friendly cold call. What is less familiar — and what federal authorities say occurs with alarming frequency — is that a reputable bank played a crucial role in parting Mr. Koch from his money.

The high-security, high-concept vault where Deutsche Bank will store $9 billion of gold
Quartz via Yahoo! Finance
Deutsche Bank, one of the world’s largest dealers of gold, has begun storing bullion in Singapore, reflecting the nation-state’s growing importance as a financial haven.

Britain readies banks for return to private ownership
Reuters via Yahoo! News
By Matt Scuffham LONDON – Britain will give its strongest indication yet that it is ready to return part-nationalised Lloyds Banking Group and Royal Bank of Scotland to private ownership later this month, political and industry sources said.

Clearing & Settlement

IntercontinentalExchange Announces Buyside Clearing Surpasses $1 Trillion in CDS Gross Notional
IntercontinentalExchange, a leading operator of global markets and clearing houses, today announced that as of June 6 it has cleared more than $1 trillion in credit default swap gross notional value by buyside participants since client clearing was launched in December 2009.

CME Group Clearing Advisory: NYMEX Options Expiration Operational Procedures for the Trading Floor and Clearing Members (A) Effective Tuesday, June 11, 2013

Indexes & Products

Nasdaq OMX Introduces New Indexes For Icelandic Bond Market

Methodology Of The Moscow Exchange Indices Calculation To Become Effective On June 20, 2013

NASDAQ OMX: Semi-Annual Review Of The OMX Iceland 6 Index


Asset Control appoints Business Development Director, EMEA
Asset Control, provider of financial data management solutions, has announced the return of Ian Cumberpatch as Associate Director of Business Development EMEA.


SEC Charges Top Officials At Investment Adviser in Scheme to Hide Theft From Pension Fund of Detroit Police and Firefighters
The Securities and Exchange Commission today charged the leader of a Detroit-based investment adviser for stealing nearly $3.1 million from the pension fund that the firm manages for the city’s police officers and firefighters so he could buy two strip malls in California. The SEC charged four other top officials at the firm for helping him try to cover up the theft.

UK’s Financial Conduct Authority Fines Xcap Securities PLC £120,900 For Client Asset Failings And Applies New Penalty Regime
The Financial Conduct Authority (FCA) has fined Xcap Securities PLC (Xcap), a retail investment and capital markets business, £120,900 for failing to adequately protect client money and client assets. This is the first client asset case the FCA has brought under the new penalty regime, which applies to breaches committed from 6 March 2010, and introduces new penalty levels in such cases.

SEC fines optionsXpress, individuals $4.8 million for naked short sales
Crain’s Chicago Business
A Securities and Exchange Commission judge has ordered optionsXpress, its former chief financial officer and a customer to pay a total of $4.8 million in fines and to return $4.2 million for illegally selling shares they did not hold.

SAC Capital case nears breakthrough on laptop access
Kara Scannell in New York –
US prosecutors are finalising an agreement with the University of Michigan that would give them access to computer files tied to an insider trading case against a former SAC Capital employee.

SEC Nets Win in ‘Naked Short’ Case
WASHINGTON—A Securities and Exchange Commission judge ruled that a former Maryland banker perpetrated a short-selling fraud aided by one of the biggest stock-options brokers in the U.S.

Environmental & Energy

IEA Urges Action to Avert Dangerous Temperature Rise
The Wall Street Journal
A global climate deal that may come into force in 2020 will come too late to avert a global temperature increase of more than 2 degrees Celsius, unless governments swiftly implement four new policy measures to curb carbon emissions, the International Energy Agency said Monday.

Global carbon emissions hit record high in 2012
China led a rise in global carbon dioxide emissions to a record high in 2012, more than offsetting falls in the United States and Europe, the International Energy Agency (IEA) said on Monday.

United States’ Contribution to Global Warming Decreased in 2012
US News & World Report
The world is on pace to more than double the expected global temperature rise due to climate change according to a new report by the International Energy Agency.


SGX Strengthens Post-Trade Services With New Lead
Singapore Exchange (SGX) is pleased to appoint Nico Torchetti as the new Head of Post Trade Services effective 1 August 2013.

Broadridge Accelerates Strategic Growth In Japan Through Multiple New Sales

Tokyo Stock Exchange: Statistics On Dates Of Annual General Shareholders Meetings For Companies Which Settle Accounts In March 2013

Frontier Markets

Dubai Shares Drop Most in More Than Year Before MSCI Decision
Dubai’s shares fell the most in more than a year as investors await an MSCI Inc. decision on whether the United Arab Emirates will be upgraded to emerging-market status. Stocks in Abu Dhabi also declined.

FTSE Opens New Offices In Dubai International Financial Centre – DIFC’s Office Will Act As A Hub For FTSE’s Growing Operations In Africa

Tehran Stock Exchange Monthly Bulletin – May 2013

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