John Lothian Newsletter: CBOE to roll out interest rate volatility index; Dutch marketmaker mulls potential sale; Banks bow to EU over limit to bonuses

Jun 14, 2012

CBOE announces the release next week of its first volatility index based on interest rates.  Amsterdam-based high-frequency firm Flow Traders, a big market maker for ETFs, has hired Lazard to explore strategic options, including its sale. The EU appears ready to force banks to limit bonuses paid to its employees, and banks are admitting privately that they might actually have to comply with the new law.  In today’s First Read, John Lothian profiles OneChicago’s David Downey; JLN’s Jim Kharouf takes to the microphone to talk about NYSE Liffe U.S.’s new products; and those who missed yesterday’s featured interview with Per Sjöberg of TriOptima get a second chance to view it.

First Read

David Downey Stands Apart
By John J. Lothian

David Downey is as pugnacious as he is passionate. He has battled and won, retired, and come back to battle again. Current CEO of OneChicago, he is a man on a mission to bring understanding and respect for OneChicago and its products. It is a fight he believes in and one he does not plan on leaving unfinished.

I first met Downey on the Internet back in its Wild West days. I interacted with him on the same online venues where I came across Jon Matte, now COO of John J. Lothian & Company, Inc. and assistant editor of this newsletter. Downey stood out then and he still stands out today.

At one point when I was unsure of the direction of the industry and the future of the introducing broker model, I approached Downey for some industry networking and idea sharing. He bought me a drink and told me he would not even talk to me until I read a book he suggested. The book was “The Innovator’s Dilemma” by Harvard professor Clayton Christensen. I have told this story before here.

I bought that book and read it twice. The lessons it taught me have stayed with me and have found their way into my business strategies since then.  

Last Wednesday Downey and Tom McCabe of OneChicago conducted a private roundtable discussion about securities futures and how OneChicago fits into the post Dodd-Frank regulatory world. Downey did a passionate job of explaining how single-stock futures are really stock loans, repos and swaps.  

With all the rigmarole about defining swaps, setting up clearing and setting the rules, he points out that in the equity world all that is already done. It is done at OneChicago.

He explained how the OneChicago EFP, or exchange for physical, is the equivalent to OTC equity swaps, such as securities lending and equity repos. He also went into detail on why the OneChicago EFP should have the same tax treatment and regulatory fees as OTC swaps.

Downey detailed how individual traders or investors could use EFPs on OneChicago to borrow money at lower rates than banks are offering. He showed how these transactions are simply stock loans, repos and swaps and allow investors to monetize their equity positions while keeping their same exposure in those stocks.

With the OneChicago NoDivRisk products – first launched back on Oct. 27, 2010 – investors, traders and market makers no longer have to worry about the expected dividends that were part of the pricing formula for OneChicago’s initial products. All the risk and uncertainty with dividends has been eliminated with the NoDivRisk OneChicago contracts. The risk is avoided.

The dynamics of the NoDivRisk EFP trade comes down simply to an interest rate. EFPs that are general collateral, or non-hard-to-borrow stocks, will trade at a positive price to the stock price. This is the carry a customer must pay to hold the single stock futures. An interesting feature Downey points out is that as interest rates rise, the SSF price rises relative to the stock price and the long holder of the SSF position makes more money. Alternatively, a trader with a margined position on some stocks will see his broker-loan rate costs go up when interest rates rise. Use SSFs and win, use a stock-loan and lose.

When Downey was asked by a Dow Jones reporter at the roundtable if he had asked for some political help from some of his large institutional owners, he flatly said no. He has been given permission by the board to get him a lobbyist to help him navigate Washington, DC to get OneChicago’s message out; but he said he does not need one. He is constantly in touch with officials at the U.S. Treasury, IRS and SEC to educate them about how OneChicago’s EFPs are the same thing as the swaps, repos and stock loans they are working on regulating. He has staked out the high ground and is standing it firmly.  He has firmly embraced Clayton Christensen’s advice to create a separate culture for an independent organization capable of bringing disruptive technologies to bear on competitors.

OneChicago is available now. The regulations and rules are already set. The clearinghouse is AA+ rated and industry owned. There is an existing flow of trades through the exchange and clearinghouse and firms are already connected.  

Do you want to trade an equity repo and have it cleared? OneChicago can do it for you today.

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Rutherford leaves CME Group
By Philip Stafford – Financial Times
Roger Rutherford has left his role as managing director of foreign exchange products at CME Group, the world’s largest futures exchange. Mr Rutherford, who was based in London, decided to leave the group to pursue other interests, the group confirmed. He joined the CME in November 2010 from CLS Bank, the settlement system for currency trades and left last Thursday.
http://jlne.ws/MCFZFA
**JK – FX turnover.

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ICE Futures U.S. Announces Daily Volume Record
IntercontinentalExchange (ICE), a leading operator of global regulated futures exchanges, clearing houses and over-the-counter (OTC) markets announced that ICE Futures U.S. established a daily volume record of 851,852 contracts on June 12, with 801,304 futures contracts and 50,548 options on futures traded during the day. The exchange’s previous daily volume record of 840,591 contracts was set on September 16, 2008.
http://jlne.ws/MCFZFG

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Transparency is coming to derivatives
Allan Grody – FOW
Capital and collateral may be the metric that supports solvency in both our financial institutions and our clearing houses but seeing what is happening proactively as transactions are conducted is what regulators believe will be the means of truly overseeing the financial system. That first step on the road to transparency seems to be close at hand with the final recommendations for putting forward a global legal entity identification regime set to go before the G20 later this month.
http://jlne.ws/MCG24i
**JK – First there were dog tags. Now there are “legal entity identifiers.”

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With New Leader, Regulator Finds a New Direction as Well
By JESSE EISINGER, ProPublica
The Office of the Comptroller of the Currency is so lenient on the banks it is supposed to regulate that it could be mistaken for a division of the United States Chamber of Commerce. Does its new head, Thomas J. Curry, have any hope of giving it a backbone?
http://jlne.ws/MCG2kA
**JK – The other OCC.

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Due To The Extreme Volatility Some Market Analysts Foresee…
Zero Hedge
Helmet time. From Oanda:
Due to the extreme volatility some market analysts foresee could result in the coming days, OANDA fxTrade will not accept any trading activity from 6:00 AM EST until approximately 3:00 PM EST, on Sunday, June 17, 2012. OANDA believes the convergence of a major market event during off-market hours represents a potential trading risk and has taken this rare step to protect traders from excessive rate fluctuations.
http://jlne.ws/MCG2kD

**JK – Wow – is Facebook moving into currencies now?

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Regulator urges client choice on fund segregation
By Alexandra Alper – Reuters
Derivatives customers should be able to choose whether to fully segregate their funds for added protection or to opt for less stringent safeguards in place now, a regulator plans to say on Wednesday.
http://jlne.ws/M2cD2X

**JK – The amazing Bart Chilton speaks again.

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Comment: Transparency is not safety
By Andrew Simpson and Marcus Hooper – Financial Times
To explain the financial crisis, many made a connection between the nature of complex instruments and transparency in financial markets. In a world which no longer trusted banks and the system they represented, there were calls for more information about exactly what was going on. The conclusion was, if bankers had to use such complex financial instruments, those instruments must be de facto bad, and opacity was the problem.
http://jlne.ws/MCG2kK

**JK – But a roll cage, helmet and five point harness is.

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Are You With the Dumb Money or the Smart Money?
By James Heaton and Nicholas Polson – Bloomberg
Market observers often divide investors into “smart money” and “dumb money.” Our research shows there may be a way to figure out which group you are in. The first place to look is prices, which reflect the interaction of smart money and dumb money and may contain valuable information about the proportion of either in the market. In other words, the price knows which category we belong to. The trick is to extract that information.
http://jlne.ws/MCFZW6

***Jon Matte says…

I love these kinds of pieces. Unfortunately, what’s missing is a simple explanation of what they mean by “smart money” and “dumb money”. Consequently, I can’t tell whether they are referring to groups of investors that experience success versus failure; a set of behaviors or characteristics that is prevalent/absent in each group; professional versus amateur investors; or simply two different kinds of Sneetches, one with stars on its belly and one without.

When talking about groups without defining the groups, it’s pretty tough to know whether anything useful has been discovered. Moreover, the whole smart money/dumb money topic can feed into a funny meme-laced fallacy that “smart money” represents a group of people who pretty much always make really good decisions about picking investments, and those decisions are the cause of a lifetime of financial success.  Clarification, anyone?

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CQG to Hold Data Visualization Showcase in London
CQG will be holding a data visualization showcase in London on June 21 from 17:30 to 20:00 GMT. The event will be held at the Eight Club Bank EC3 at 1 Change Alley, London, EC3V 3ND. Thom Hartle, director of product training, will be leading the showcase.

From CQG:

Discover how the breadth of market data and Microsoft Excel data visualization features in CQG can greatly increase your work flow efficiency. Learn techniques for building RealTimeData (RTD) Excel spreadsheets in CQG that will give you powerful decision-making tools. These techniques are featured in recent issues of Automated Trader and Inside Market Data.

Schedule:
17:30 – Registration
18:00 – 18:45 – Welcome and introduction
18:45 – 20:00 – Cocktails and hors d’oeuvres

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TABB Group and FINCAD Webinar to Address Intraday Risk Measurement in a Market of Complexity and Regulatory Uncertainty
PR Newswire via Yahoo! Finance
FINCAD, the market leader for innovative derivatives solutions, and TABB Group are hosting an informational webinar titled, Risk Measurement On-demand: Complexity, Volatility and Regulatory Uncertainty, on June 20, 2012 at 11:00 EDT / 08:00 PDT. The webinar will discuss the results of the latest TABB research report. According to this industry report, calculating complex exposures on-demand is not only becoming a regulatory requirement but a more potent competitive differentiator.
http://jlne.ws/MCG2kS

MarketsWiki.tv

NYSE Liffe U.S. Takes on Fed Funds & LIBOR
MarketsWiki.tv
With interest rates hovering around zero, with no lift in sight, the overnight rates market has been looking for new instruments that better reflect the market. NYSE Liffe U.S. is trying to fill that demand with its new General Collateral Finance or GCF Repo Index futures contract. The new contract, which will compete with the Fed Funds futures and LIBOR, is designed by DTCC for NYSE Liffe U.S. and is set to launch on July 16th. JLN editor-in-chief Jim Kharouf reports on NYSE Liffe U.S.’s recent introduction of the new contract in Chicago.
http://jlne.ws/M388oM

**JK – A first effort at a video news report from JLN.

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Per Sjöberg of TriOptima Discusses the Changing Regulatory Environment & Portfolio Reconciliation & Compression
MarketsWiki.tv
The ongoing regulatory overhaul is forcing more firms to find ways to reduce risk and improve capital efficiencies. TriOptima has been working with firms on both issues using its triResolve service for portfolio reconciliation and triReduce services, for portfolio compression. The firm’s services have helped terminate over $110 trillion total notional volume in interest rate swaps since 2008. Per Sjöberg, group chief executive officer of TriOptima, spoke recently with JLN’s Jim Kharouf about the changing landscape.
http://jlne.ws/MAfW1S

**JK – See why TriOptima thinks its in the right place at the right time.

JLN Options

FOA calls for harmony on listed derivatives reporting rules
Anish Puaar, The Trade
Trade body the Futures and Options Association (FOA) has raised concerns with UK and Italian regulators on potentially burdensome regulatory requirements for reporting listed derivatives trades.
http://jlne.ws/LWRRWi

Bank Of America’s $67 Trillion In Derivative Positions Explained
Andrew Mann, Seeking Alpha
…This article will focus solely on Bank of America’s (BAC) derivative activities in its most recent quarter. I will be using information from the most recent 10-Q in order to shed some light on this often misunderstood issue.
How does Bank of America account for its derivatives, and are they included on the balance sheet?
http://jlne.ws/LWWNdK
** Somewhat lengthy but a good explanation with a little bit of everything including options. – JB

Japan Triples Down on Risk
James Simms, The Wall Street Journal
Two decades of ultralow interest rates have pushed Japan’s quest for decent returns to extremes…
The new twist is the addition of call-options on securities owned by the investment vehicle. The covered-call strategy provides an extra income stream. The strategy is supposed to mitigate downside risk while lifting the targeted yield on the fund.
http://jlne.ws/LAs5rs

 

MarketsWiki

MarketsWiki Page of the Day
Roger Rutherford
http://jlne.ws/NyhHSB

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MarketsWiki Recent Updates

People

Philip Stafford; Roger Rutherford; Edward Boyle; Jeremy Grant; William Karsh

Companies, Organizations and Groups

NYSE Liffe U.S.; National Stock Exchange; Orc Software

Products

GCF Repo Index futures

Miscellaneous

Compliance

Statistics

24,920,539 pages viewed, 6,897 articles, 142,008 edits
MarketsWiki Statistics

Lead Stories

CBOE to roll out interest rate volatility index
Reuters
The Chicago Board Options Exchange said on Wednesday it will roll out its first interest-rate-based volatility index next week, which is expected to be followed by participants in the fixed-income market.
http://jlne.ws/MCG2B6

Dutch marketmaker mulls potential sale
Tim Cave and Jacob Bunge
A Dutch high-frequency trading firm – which is one of Europe’s biggest marketmakers in exchange-traded funds – has appointed a financial adviser as part of a strategic review that could lead to a sale of the business.
http://jlne.ws/MCG24a

Banks bow to EU over limit to bonuses
By Patrick Jenkins and Brooke Masters in London and Alex Barker in Brussels – Financial Times
Bankers’ bonuses across the European Union are set to be limited by law, with many bank lobbyists admitting in private that they have lost the fight against a European Parliament initiative to limit the size of bonuses relative to salary.
http://jlne.ws/MCG0te

EU’s Almunia sees closure of one Spanish bank
Reuters via Yahoo! News
Spain may need to wind down one of its bailed-out savings banks, the European Union’s competition chief said on Wednesday, warning liquidation of a bank may be preferable if the costs of rescuing it are too high for taxpayers.
http://jlne.ws/MCG2B9

Dimon Fires Back at ‘Complex’ System in U.S. Senate Grilling
Dawn Kopecki, Phil Mattingly and Clea Benson – Bloomberg
JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon spent much of his time at a hearing where U.S. senators aimed to put him on the defensive firing back at the federal regulatory system.
http://jlne.ws/MCG2Bc

Dimon Gives Regulators New Ammunition for Tougher Volcker Rule
JPMorgan Chase & Co. (JPM) Chief Executive Officer Jamie Dimon conceded a key point when pressed by lawmakers about a proposed ban on proprietary trading at banks: Had the rule been in place, it may have prevented the firm’s recent $2 billion loss.
http://jlne.ws/MCG2Bd

Banks resort to ‘block’ offerings
By Ajay Makan and Arash Massoudi in New York – Financial Times
Banks are taking on the risk of issuing shares on behalf of companies through “block” offerings as they seek to drive volume in equity capital markets with US initial public offerings stuck in the doldrums.
http://jlne.ws/MCFZWd

Lucky little Cyprus
Masa Serdarevic – FT Alphaville
Lucky little Cyprus. It just downgraded two notches by Moody’s to Ba3, has problems with its banks, and will have even bigger ones if a Grexit occurs, but it also has suitors. And that’s suitors in the plural. Finance ministers in the PIGS countries must be green with envy.
http://jlne.ws/MCG2Bg

Rating Action: Moody’s Downgrades Cyprus’s Government Bond Ratings To Ba3 From Ba1 – On Review For Further Downgrade
http://jlne.ws/MCG0cx

IMF Completes Sixth Review Under The Extended Arrangement With Ireland And Approves E1.4 Billion Disbursement
http://jlne.ws/MCG0cy

Every Trader Needs An Entourage
By Brett Berkowitz – Advanced Trading
Vincent Chase had his boys in LA. Carrie Bradshaw had her girls in NYC. They traveled in packs because each character offered something unique — whether it was Ari’s neurotic drive or Samantha’s wild appetites they were part of a team. In short, the Entourage wouldn’t have been an entourage without the entire gang.
http://jlne.ws/MCFZW0

Regulatory

ESMA Announces A Vacancy For An Officer For Corporate Finance – SNE
http://jlne.ws/MCG2Bl

Speech By SEC Chairman Mary L. Schapiro: Remarks At The Meeting of the Investor Advisory Committee
http://jlne.ws/MCG2RC

SIFMA Encourages Alignment Of FNM, FRE Operations As First Step Of Transition
http://jlne.ws/MCG0cD

In Cooperation With Russell, EDHEC-Risk Institute Makes Solvency II Benchmarks Available Online To European Insurance Companies
http://jlne.ws/MCG0cE

Verena Ross, Executive Director Of ESMA, Spoke At The ICSA In Copenhagen
Verena Ross gave a speech on ESMA’s role in European and international regulatory cooperation, at the International Council of Securities Associations in Copenhagen on 12 June.
http://jlne.ws/MCG2RJ

“Where The History Comes From” Speech Of CFTC Commissioner Bart Chilton, OpRisk Europe London, England
http://jlne.ws/MCG0cH

Exchanges & Trading Facilities

LME copper players turn up heat on warehouse queues
Reuters via Yahoo! News
Global copper market heavyweights are drafting proposals to stop metal from getting stuck in queues leaving storage facilities, as such delays would threaten the credibility of the London Metal Exchange’s (LME) flagship product, industry sources said.
http://jlne.ws/MCG0cK

BM&FBOVESPA Presents The Results Of “Report or Explain”
At the Rio + 20 United Nations Conference on Sustainable Development, BM&FBOVESPA will present data related to sustainability reports or similar published by Brazilian publicly traded companies. The initiative is named “Report or Explain” and seeks to encourage listed companies to report to all stakeholders (especially investors and analysts) information and results related to social, environmental and corporate governance aspects.
http://jlne.ws/LGt742

NYSE Brings Big StartUp Small Business Resource Tour To Houston, TX – Accion And Yelp To Lead Marketing And Microfinance Workshop
http://jlne.ws/MCG2RK

NASDAQ OMX Helsinki Disciplinary Committee Imposed A Warning To Outokumpu Oyj For Breaching The Rules Of The Stock Exchange
http://jlne.ws/MCG2RL

Hedge Funds & Managed Futures

Sinclair to Liquidate Hedge Fund After Lacking Edge
Bloomberg
Hedge-fund manager Paul Sinclair is the latest casualty of Europe’s sovereign-debt turmoil, almost six thousand miles away from the epicenter of the crisis.
http://jlne.ws/MCG0t1

Former Citadel, Highbridge Manager Plans North Asia Hedge Fund
Bloomberg
Toby Bartlett, a former manager at Citadel LLC and Highbridge Capital Management LLC, plans to start his own North Asia-focused stock hedge fund as soon as next month, according to a document given to potential investors.
http://jlne.ws/MCG0t2

Large Institutions Discuss New Marketplace for Bonds
By SERENA NG And KIRSTEN GRIND – WSJ
Big money managers and Wall Street banks are laying the groundwork for a new marketplace for corporate bonds, an effort that highlights the heft of large investors and the impact of new rules limiting bank risk-taking.
http://jlne.ws/MCG2RO

Insight: JPMorgan bets sent false signals to wider debt market
Reuters via Yahoo! News
NEW YORK (Reuters) – JPMorgan Chase & Co’s disastrous bets on corporate debt may have caused unexpected collateral damage: erratic behavior in a barometer that measures the financial health of blue-chip U.S. companies. Those bets used Wall Street derivatives called credit default swaps.
http://jlne.ws/MCG0t7

Is High Frequency Trading Ruining the Market?
Yahoo! Finance: Breakout
High-frequency trading (HFT) is a market-skewing, artificial form of speculation that places undo pressure on already fragile markets, which, by doing so, increases the risk of another flash crash or something much worse.
http://jlne.ws/MCG0t8

The Exit Interview with SWIFT’s CEO
Lázaro Campos: ‘It’s a good time to move on.’
Eugene Grygo | Financial Technologies Forum [free registration required to access]
After a quarter century with the SWIFT financial messaging and services cooperative, CEO Lázaro Campos’ first order of business after he leaves will be two months on a beach somewhere on the Spanish coast. Campos is stepping down at the end of this month and will be replaced by Gottfried Leibbrandt, who is SWIFT’s head of marketing and a key architect for the SWIFT2015 initiatives for growth.
http://jlne.ws/MCG0tb

Banks & Brokers

Banks fail to peg bonuses to performance: G20 body
Reuters via Yahoo! News
Banks are failing to comply with global rules requiring them to peg bonuses to long-term company performance, the regulatory task force of the Group of 20 leading economies said on Wednesday.
http://jlne.ws/MCG38f

Lazard elects Citi ex-chairman Parsons to board
Reuters via Yahoo! News
Richard Parsons, the former chairman of Citigroup Inc , is back on the board of a financial services company. Investment bank Lazard Ltd on Wednesday said it elected Parsons, effective immediately. He stepped down at Citigroup’s annual meeting in April, after serving as a director for 16 years and chairman since February 2009.
http://jlne.ws/MCG0tg

HSBC Boosts Foreign-Currency Emerging Bonds After Yields Surge
Bloomberg
HSBC Global Asset Management is boosting holdings of foreign-currency debt in emerging markets after concern efforts to contain Europe’s debt crisis will fail sent yields to a five-month high.
http://jlne.ws/MCG38i

6 Reasons Why Spain’s Bank Bailout Plan Is Awesome
Business Insider via Yahoo! Finance
According to hedge fund manager Peter Tchir.
http://jlne.ws/MCG38j

The bank that’s rising amid Europe’s ashes
CNN Money
Vernon Hill opened Metro Bank in London just two years ago. So far it’s defying all odds — it’s not only surviving, it’s thriving.
http://jlne.ws/MCG38m

Goldman CEO sees possible downgrade as “concerning”
Reuters via Yahoo! News
The chief executive of Goldman Sachs Group Inc said on Wednesday the fact that Moody’s Investors Service may downgrade his company’s debt ratings is “concerning” and at odds with how the bank sees itself.
http://jlne.ws/MCG0Jz

Goldman Said to Hire Deutsche Bank’s Head of Distressed Sourcing
Bloomberg
Goldman Sachs Group Inc. (GS) hired Duane Masucci, Deutsche Bank AG (DBK)’s head of distressed sourcing, according to four people with knowledge of the move.
http://jlne.ws/MCG0JB

Morgan Stanley Said to Name Co-Heads of Debt-Underwriting Unit
Bloomberg
Morgan Stanley (MS) named Leo Civitillo and Claus Skrumsager as global co-heads of fixed-income underwriting, three months after the U.S. leader of the unit was arrested, according to a person briefed on the decision.
http://jlne.ws/MCG3oE

Deutsche Bank not planning job cuts at Asia investment bank
Reuters via Yahoo! News
Deutsche Bank’s finance chief said there were no plans for more cost-cutting measures at the investment banking business of Germany’s biggest lender in Asia. “I am not aware of anything,” CFO Stefan Krause said on the sidelines of a conference on Thursday when asked whether Deutsche Bank was cutting jobs in Asia.
http://jlne.ws/MCG0JE

Federal Reserve names new chief at Denver branch
Denver Post
The Federal Reserve Bank of Kansas City said today it has appointed Alison Felix as assistant vice president and its new branch executive in Denver.
http://jlne.ws/MCG0JH

Newedge metals woes deepen as senior brokers exit
Reuters via Yahoo! News
Three senior metals dealers at Newedge Group have resigned following the departure of the global metals chief, dealing a blow to the commodities business of one of the world’s largest brokers. Joel Spier, head of metals for the Americas, and John Peiser, a senior director, in New York left the company on Tuesday, a Newedge official told Reuters on Wednesday, just days after the surprise resignation of global metals chief Mike Frawley.
http://jlne.ws/MCG3oJ

E*TRADE Financial Corporation Reports Monthly Activity for May 2012; Provides Updates to Its Loan Delinquencies
http://jlne.ws/MCG104

First Derivatives And FOREX CLUB Announce Strategic Partnership
First Derivatives plc (“FD”), a leading provider of software and consulting services to global investment banks, brokers and hedge funds has today announced that it has entered a strategic partnership with FOREX CLUB, a leading1 online broker. The partnership will enable FOREX CLUB clients to benefit from global access to the largest liquidity pools in the market provided by 12 leading global banks and institutional levels of pricing, execution and spreads in foreign exchange trading.
http://jlne.ws/MCG3oO

With Dimon’s Halo Atilt, Blankfein Looks More Like a Darling
By SUSANNE CRAIG – NY Times
There may be an opening for least-hated banker in America, and Lloyd C. Blankfein seems interested in applying.
http://jlne.ws/MCG109

If You Work At Goldman Sachs, The Bank Will Give You A Wedding Present
Business Insider
The big banks may not be as “vampire squid-y” as people seem. Julie Steinberg at FINS has found a nice little vacation perk that employees at Goldman Sachs and Credit Suisse get- an extra week off the year you get married .
http://jlne.ws/MCG10c

Morgan Stanley Financial Adviser: We Ignore Social Networks At Our Peril
Forbes
One Morgan Stanley Smith Barney executive explains why financial advisers can’t afford to ignore social media.
http://jlne.ws/MCG10g

Clearing & Settlement

Alliance Bernstein Starts Clearing Interest Rate Swaps with SwapClear
LCH.Clearnet Limited today announced that Alliance Bernstein is now actively clearing over-the-counter interest rate swaps through LCH.Clearnet’s SwapClear service. The move comes in advance of regulatory mandates in the U.S. to clear over-the-counter derivatives.
http://jlne.ws/MCG3oT

Indexes & Products

Index Traded By Iksil Shrinks as Dimon Seeks to Stem Loss
Bloomberg
Wagers in the credit derivatives index said to contribute to JPMorgan Chase & Co. (JPM) ‘s $2 billion loss dropped last week to the lowest in three months in a sign that the biggest U.S. bank and hedge funds trading against it may be unwinding bets.
http://jlne.ws/MCG10i

S&P Indices Announces Changes In The S&P/TSX Canadian Indices – A Deletion From The S&P/TSX Venture Composite Index
http://jlne.ws/MCG3Fa

Indo Tambangraya Megah Of Indonesia Added To Dow Jones Emerging Markets Select Dividend Index
http://jlne.ws/MCG1gB

ETFGI Latin America ETF/ETP Industry Insights, May 2012
http://jlne.ws/MCG1gG

ETFGI Asia Pacific (Ex-Japan) ETF/ETP industry insights, May 2012
http://jlne.ws/MCG3Fj

Review Of FTSE/ATHEX 20 Capped Index
http://jlne.ws/MCG1gI

Technology

CDM Pekao Chooses SunGard’s Valdi for Warsaw Stock Exchange Connectivity
Centralny Dom Maklerski Pekao S.A., one of the largest securities firms in Poland and part of the UniCredit Group, has selected Valdi for direct market access trading on the Warsaw Stock Exchange.
http://jlne.ws/K2skHq

Juniper names low latency expert Andrew Bach as its financial services chief architect
FierceTelecom
Andrew Bach, a name that’s become synonymous with the low latency networking movement in the financial services industry, has joined Juniper Networks ( NYSE: JNPR ) as the vendor’s new chief architect for its Financial Services Team. He comes to Juniper from NYSE Euronext, where he served as senior vice president, Global Head of Network Services.
http://jlne.ws/MCG1gN

IP Trading Turrets Featured at Upcoming International Trading Technology Seminar
PRWeb
IP trading turrets allow users to leverage the power of Voice-over-IP (VoIP) systems to enjoy full trader system functionality with additional benefits such as global free seating and enhanced business continuity features. IP Trade Networks changed the landscape of trading technology with the development of the first turret that did not require the use of a legacy PBX voice technology
http://jlne.ws/MCG4cc

Perseus Telecom Wins Global Telecoms Business Innovation Award for Fastest Connection to BM&FBOVESPA
Perseus Telecom, global provider of enterprise and financial telecommunications, announced today the Global Telecoms Business 2012 Innovation Award for Financial Network Innovation has been presented to Perseus Telecom and partner GlobeNet.
http://jlne.ws/MCG4cf

MarketPrizm Announces PrizmScope Tick Data Cloud Service – An On-Demand Real-time And Historical Data Service For European Equities/Derivatives In Partnership With OneTick
http://jlne.ws/MCG4ck

Tata Communications Launches Global Low Latency Network To Accelerate High Frequency Trading – Network Will Deliver Unparalleled Global Connectivity, Scalability And Flexibility With Innovative Ethernet Technology
http://jlne.ws/MCG4cn

Enforcement

CFTC Settles Charges against Defendant Robert Mihailovich, Jr. for Making False Statements to the CFTC
The U.S. Commodity Futures Trading Commission (CFTC) obtained a federal court consent order against defendant Robert Mihailovich, Jr. of Rockwall, Texas, requiring him to pay a $40,000 civil monetary penalty. The order, entered in the U.S. District Court for the Northern District of Texas by Judge Jane J. Boyle, also bans him from seeking registration with the CFTC for 10 years, and from engaging in certain commodity-related activities, including trading, for a five-year period.
http://jlne.ws/MCG3VK

Jury Gets Insider Case of Ex-Goldman Director
By PETER LATTMAN and AZAM AHMED – NY Times
During closing arguments in the insider trading trial of Rajat K. Gupta on Wednesday, a prosecutor distilled a dizzying number of exhibits — phone records, board minutes, trading logs and e-mails — into a cogent narrative of the government’s case.
http://jlne.ws/MCG3VO

Stanford to learn sentence for role in $7B swindle
Associated Press via Yahoo! News
If federal prosecutors have their way, former jet-setting Texas tycoon R. Allen Stanford could receive a prison sentence that spans two centuries for bilking investors out of more than $7 billion over two decades in one of the largest Ponzi schemes in U.S. history.
http://jlne.ws/MCG3VR

ASIC winds up $3.6 million scheme
http://jlne.ws/MCG3VS

[ASIC] More than $630,000 refunded to Toyota customers following overcharged premiums
http://jlne.ws/MCG3VT

ASIC bans Victorian pay day lender
http://jlne.ws/MCG3VU

Environmental & Energy

Rio, China Say They Won’t Use Sold CO2 Credits for Limits
Bloomberg
Officials from Rio de Janeiro and China said they would not use emission-reduction credits that have been exported when accounting for new domestic greenhouse- gas targets, potentially easing climate negotiations.
http://jlne.ws/LYCz3t

Hillary Clinton to head US delegation to UN earth summit
The Hill’s E2 Wire
Secretary of State Hillary Clinton will lead the U.S. delegation at the upcoming United Nations Conference on Sustainable Development (dubbed Rio+20) in Rio de Janeiro, Brazil, the State Department announced Tuesday.
http://jlne.ws/MPjjpQ

Cap And Trade Lives, And Works, In Northeastern US
The Energy Collective
Cap and trade went nowhere in Congress early in the Obama administration, but that’s not the end of the emissions-limiting scheme’s story in the United States, not by a long shot.
http://jlne.ws/KoFVh6
**RKB – Worthy blog that even regularly generates informed public comments.

Asia-Pacific

SGX links Chicago and London to Asia using BT
Singapore Exchange (SGX) and BT today jointly announced that SGX will use BT Radianz services to provide access and connectivity for its new hubs in Chicago and London. SGX is the first Asian exchange with hubs in the U.S. and Europe, a move intended to bring its markets closer to international investors.
http://jlne.ws/MCG3VX

China futures firms eye asset management
By Leanne Wang – Asian Investor
The regulator is planning a pilot scheme to allow futures companies to broaden their investments, meaning CTA funds may be set for take-off.
http://jlne.ws/LjXkp2

HK regulator bows to private banking demands
By Paul J Davies in Hong Kong – Financial Times
Hong Kong’s banking regulator has bowed to private banking industry demands to cut red tape in a bid to help the Chinese territory compete better with Singapore.
http://jlne.ws/MCG6Rn

Thailand Futures Exchange Upgrades Four Gold Members To Trade All Derivatives Products
The Thailand Futures Exchange pcl (TFEX), under The Stock Exchange of Thailand group, reveals that its board has approved four current precious metal-related members to become full members, allowing them to trade all types of derivatives products on the TFEX from June.
http://jlne.ws/MCG4sV

South Korea’s Pension Fund to Buy More Domestic Stocks in 2013
Bloomberg
South Korea’s National Pension Service plans to spend 6.6 trillion won ($5.7 billion) buying more of the nation’s stocks next year, signaling its support for equities amid Europe’s worsening debt crisis.
http://jlne.ws/MCG6Rr

BOC Becomes First Mainland Bank To Obtain Taiwan Branch License
Forbes
China’s has become the first mainland bank to obtain a branch license in Taiwan, the bank said in a statement yesterday.
http://jlne.ws/MCG6Rs

Shanghai Stock Exchange, China Securities Index Set Up New Index Expert Committee
http://jlne.ws/MCG4t0

Thai Bourse Announces SET Indices Semi-Annual Review
The Stock Exchange of Thailand’s (SET) announces the result of the semi-annual index review for SET50, SET100, and SETHD indices for the second half of 2012 (July 1-December 31), SET Group Head, Products Business & Development Kesara Manchusree said.
http://jlne.ws/MCG4Jf

Shanghai Stock Exchange Market Closure Schedule For Dragon Boat Festival 2012
http://jlne.ws/MCG6Rz

Shanghai Stock Exchange, China Securities Index Co., Ltd.: New Expert Consultative Committee And Appraisal Result For Corporate Governance Sector Unveiled
http://jlne.ws/MCG6RA

Monetary Authority Of Singapore Consults On Technology Risk Management Guidelines And Notice
http://jlne.ws/MCG6RF

Frontier Markets

Nigeria suspends head of bourse regulator; audits body over fund mismanagement allegation
AP
The regulator of Africa’s second-largest bourse says its head is under investigation over a fund mismanagement allegation.
http://jlne.ws/MCG77Z

MSCI To Announce On June 20, 2012 The Results Of Its 2012 Annual Market Classification Review
http://jlne.ws/MCG780

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