Regulators in the EU are said to be preparing a thumbs-up for the ICE/NYSE Euronext merger deal. The new credit-default swap futures at ICE listened to crickets at yesterday’s debut, but by afternoon began to see trading. In Japan, easier stock-shorting rules are slated to become permanent in November. In today’s First Read section, take a look at our latest MarketsWiki.tv video interview (as well as the last two – we’ve been busy!): Jeremie Bacon, the new president of Orc Americas, talks about why he decided to leave the firm he co-founded, Backstop Solutions, and his future with Orc Group.
Jeremie Bacon on Taking the Reins at ORC Americas and Modular Technology
After a decade of running his own technology firm, Jeremie Bacon decided it was time for a new challenge. In May, he took the reins as president of Orc Americas, the Chicago-based subsidiary of Orc Group.
Bacon sat down with JLN editor-in-chief Jim Kharouf to talk about why decided to leave the firm he co-founded, Backstop Solutions, a software-as-a-service company in the alternative investment space. Bacon said he was impressed with ORC’s established footprint in the industry and reputation it has built since its launch in 1987. He also likes the relatively new ownership structure of the firm. ORC, which had been publicly traded since 2000, was taken private by Orc is owned by Cidron Delfi Intressenter AB, which is in turn owned by Nordic Capital Fund VII, a Swedish private-equity firm last year.
ICE Throws Down Gauntlet on Payment for Order Flow
Dan Collins Report
A new sheriff is coming to the world of cash equities and options and he is determined to change the way those markets trade. ICE Chairman and CEO Jeff Sprecher dropped a bomb during last week’s Sandler O’Neill’s Global Exchange & Brokerage Conference in talking about the new markets he is acquiring with ICE’s acquisition of NYSE Euronext
GSA mulls joining the fee-cutting set
Harriet Agnew – Financial News
UK-based hedge fund manager GSA Capital is considering the launch of a new fund that will not charge a performance fee, Financial News has learnt.
***** There’s no such thing as a fee lunch.
High-Frequency Trading Tactic Lowers Investor Profits
High-frequency trading strategies that exploit today’s fragmented equity markets reduce investor profits overall, according to new findings by University of Michigan engineering researchers.
***** According to Purdue University engineering researchers, University of Michigan engineering researchers suck.
Jack Schwager on Market Wizards and How the CTA Space is Changing
Jack Schwager is a well-known name in the financial market community today, as author of trading classics such as: Market Wizards in 1989, The New Market Wizards in 1992 and Stock Market Wizards in 2001. He’s added to the series in May 2012, with Hedge Fund Market Wizards, and more recently released book Market Sense and Nonsense, where he explores investment models and the theories of how markets work.
He spoke with JLN editor-in-chief Jim Kharouf about hedge fund managers and how the CTA space has changed, what’s happened to managed futures since its breakout year in 2008 and his opinion of just how much growth is left for CTA sector.
Schwager, who is currently a co-portfolio manager at ADM Investor Services, helps manage ADM’s Diversified Strategies Fund, a portfolio of futures and FX managed accounts. The fund combines both system and discretionary managers that use technical and fundamental strategies.
IDG’s Computerworld Names CME Group to 2013 List of Best Places to Work in Information Technology
CME Group, the world’s leading and most diverse derivatives marketplace, today announced it has been selected by IDG’s Computerworld as a 2013 Best Place to Work in Information Technology (IT) honoree, one of 100 top organizations that provide IT employees with a stimulating work environment as well as great benefits and compensation. This is the ninth consecutive year the company has been named to this list, and once again CME Group is the only financial exchange company to receive the honor.
***** Next up, it will be the Uber place to work.
Spot Trading Named Three Consecutive Years as One of “Chicago’s 101 Best and Brightest Companies to Work For”
Spot Trading LLC, a leading proprietary trading firm, announced today that the National Association for Business Resources is honoring the firm for the third consecutive year as one of “Chicago’s 101 Best and Brightest Companies to Work For”.
***** See Spot Run.
Risks of Too Much Oneness
Francesco Guerrera – MoneyBeat – WSJ
“E pluribus unum,” “out of many, one” is a great motto for a multicultural nation like the U.S. For investors, not so much. Yet, for the past few years, the phrase emblazoned on the U.S. seal has been the perfect description of the markets’ odd behavior, courtesy of the Federal Reserve and its counterparts in Frankfurt and Tokyo.
***** Too narrow of a focus will always get you run over.
Ex-regulator: Dodd Frank ‘a field day’ for lawyers
Financial agencies’ zealous pursuit of hundreds of regulations required by the Dodd-Frank Act has led to a proliferation of lawsuits and vacated rulemakings, a former member of the Securities and Exchange Commission said Monday.
US Falls Behind in Creating Rich Entrepreneurs
Despite the high-profile examples, America may actually be falling behind when it comes to creating entrepreneurial wealth. A study from Barclays finds developing countries now lead the U.S. when comes to wealth creation by entrepreneurs.
***** A couple more Red Bulls and we’ll get this all straightened out.
‘Wolf of Wall Street’: Boiler-Room Antics on the Big Screen
WILLIAM ALDEN – NYTimes.com
Before he went to prison, Jordan Belfort amassed a net worth of more than $100 million wh
ile still in his mid-20s, with a mansion in Southampton, N.Y., and a 167-foot yacht. This fall, Mr. Belfort’s financial shenanigans are set to be represented in a movie adaptation of his 2007 memoir, “The Wolf of Wall Street.”
***** From the Great Gatsby to this, is such a jump.
***JM: I see they decided on the OTHER Leo for the title role…
Compliance Advice on SEC’s Market Access Rule from Julie Dixon of Titan Regulation
SEC Rule 15c3-5 (“Market Access Rule”), finalized in November 2010, is the commission’s response to the May 6, 2010 “flash crash” in which the U.S. equity market plunged nearly ten percent in a matter of minutes, then quickly rebounded. Compliance with the rule, which places risk management controls on any broker-dealer that offers direct trading access, has been required since November 2011, yet firms still have lingering questions about the adequacy of their self-policing programs. Julie Dixon, managing principal at Titan Regulation, discusses the origins of the Market Access Rule and how it affects buy side firms and their trading activity. She also offers advice on how hedge funds and broker-dealers can be sure their programs are compliant, and what a firm may expect during a regulatory audit of its risk systems.
MarketsWiki Recent Updates
Companies, Organizations and Groups
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40,776,419 pages viewed, 7,525 articles, 160,809 edits
EU Said to Raise No Objections to ICE Takeover of NYSE Euronext
Nandini Sukumar – Bloomberg
European antitrust regulators have lodged no objections to IntercontinentalExchange Inc.’s takeover of NYSE Euronext as a decision on the transaction approaches, according to a person with direct knowledge of the matter.
ICE Sees Late Trade in Credit-Default Swap Futures
Katy Burne – MoneyBeat – WSJ
IntercontinentalExchange’s futures tied to credit default swaps traded Monday afternoon in their market debut, after seeing no trades earlier in the session, according to a spokeswoman for the Atlanta exchange.
Relaxed Japan Short-Selling Rules to Be Permanent From November
Eleni Himaras – Bloomberg
Rules making it easier for investors to short Japanese stocks will become permanent in November, according to the nation’s markets regulator.
Britain Charges Former Trader in Libor Investigation
JULIA WERDIGIER – NYTimes.com
LONDON – Britain’s Serious Fraud Office said Tuesday that it had filed eight fraud charges against a former UBS trader, Thomas Hayes, in connection with the manipulation of the London interbank offered rate, or Libor.
Britain wins safeguard in EU market rules deal
Britain won backing from its European Union partners on Monday to prevent parts of its financial services sector potentially having to relocate to the euro zone.
Swiss Bankers Stripped of Secrecy as Minister Embraces Data Swap
For almost eight decades, many Swiss bankers had an easy job taking in often untaxed money from wealthy customers from around the world. Now, the country’s first female finance minister is changing the way Switzerland’s 300 banks are doing business.
Swiss Parliament Pushes Back on U.S. Banks Deal
JOHN LETZING – WSJ.com
The lower house of Switzerland’s parliament voted against adopting a plan for banks to step around the Alpine nation’s banking secrecy laws and hand information about their dealings with suspected American tax evaders to U.S. authorities in an attempt to reach a sweeping resolution.
Obama says Bernanke has ‘stayed a lot longer’ than he wanted at Fed
President Barack Obama hinted in an interview aired on Monday that he may be looking for a new chief of the U.S. Federal Reserve Bank, saying current Chairman Ben Bernanke has stayed a lot longer than he had originally planned.
EU Agrees on Tighter Oversight of ‘Dark Pools’
TOM FAIRLESS – WSJ.com
European Union states reached a tentative deal Monday to tighten regulation of derivatives markets that sets finance ministers on a collision course with the European Parliament, opening the prospect of months of haggling over a compromise deal.
Regulators to set post-crisis rules for capping bank risk-taking
Reuters via Yahoo! News
By Huw Jones LONDON – Regulators decide this week how banks should set a limit to the risk they take onto their balance sheets, with investors likely to pressure lenders to comply before formal implementation in 2018.
CFTC Certifies Futures Contracts on the MSCI World Index, MISCI Europe Index, MSCI Japan Index, and the MSCI All Countries Asia Pacific ex-Japan Index Submitted by Eurex Deutschland
The Commodity Futures Trading Commission’s Division of Market Oversight issued a letter advising Eurex Deutschland that its MSCI World Index, MSCI Europe Index, MSCI Japan Index, and MSCI All Countries Asia Pacific ex-Japan Index futures contracts submitted for review on April 29, 2013 were deemed certified.
CFTC’s Division of Market Oversight Provides Time-Limited No-Action Relief to Provide for Transition to SEF Registration
The Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight (DMO) today announced the issuance of a time-limited no-action letter providing temporary no-action relief to entities that have been operating pre-Dodd Frank trading platforms. The Commission published its final SEF rules in the Federal Register on June 4, 2013.
Are Average Investors Better Off Since Crisis? Top Regulator Says: Not Really
Yahoo! Finance: The Daily Ticker
CFTC Commissioner Bart Chilton is an outspoken advocate for financial reform to protect consumers, but he’s also outspoken about the lobbying and litigation that hold up the process. And there never seems to be an absence of stories that could leave the average investor feeling like the markets are, quite frankly, rigged against them.
ASIC refines dark liquidity, high-frequency trading rules
‘ASIC’s taskforces on high-frequency trading and dark liquidity, and earlier work over the past two years, has seen an improvement in the awareness of these areas of trading, hence the move not to proceed with some rules at this time,’ ASIC Commissioner Cathie Armour said.
ASIC and the Australian Charities and Not-for-profits Commission sign an MOU
[ASIC] Make your first money decision a good one
Markets In Financial Instruments: Council Of The European Union Sets Out Its Position
The Permanent Representatives Committee today agreed, on behalf of the Council, its position on new rules on the provision of services for investments in financial instruments and on the operation of regulated financial markets.
Exchanges & Trading Facilities
ICE adds interval price limit circuit breaker
Intercontinental Exchange (ICE) Group’s ICE Futures US exchange has today launched interval price limit (IPL) functionality on futures contracts. The IPL system will act as a temporary circuit breaker on ICE’s electronic platform.
LME says Kaohsiung in Taiwan is new port for physical delivery of contracts
South China Morning Post
The London Metal Exchange has approved Kaohsiung to be the ninth port in Asia that can accept physical delivery of seven types of its metal contracts.
NASDAQ OMX Newsroom – Press Release – NASDAQ OMX
The NASDAQ OMX Group, Inc. today announced four new university clients—bringing academic institution totals to 30—who have selected Directors Desk, one of the world’s leading secure board portals, to bolster board communications and effectiveness.
CFE Modifies Pricing For S&P 500 Variance Futures Contract
CBOE Futures Exchange, LLC on Monday, June 24 will revise the pricing method for its S&P 500 Variance futures contract, which began trading on CFE in December 2012. The change involves the timing of when CFE converts volatility points to futures prices so that the prices of VA futures are more directly comparable to prices in the over-the-counter variance swap market.
EEX: NCG Futures to be migrated onto PEGAS on 27 June
The European Energy Exchange (EEX) continues to migrate its natural gas products onto PEGAS, the EEX and Powernext common exchange platform.
[CBOE] AIM Auto Match with a Limit Activation
MIAX Options Exchange Market Maker Orders In Appointed Classes
Hedge Funds & Managed Futures
BlackRock Weighs Merits of Standardized Corporate Bond Issues
Katy Burne – MoneyBeat – WSJ
BlackRock Inc., anticipating a logjam in the corporate bond market as interest rates rise, is proposing a solution to lower trading volumes: having borrowers issue more-uniform deals.
The Dow Jones Credit Suisse Hedge Fund Index Finished Up 0.42% in May
An Introduction to Dynamic Hedging with Autospreader
TradeTalk – Trading Technologies
When considering what to cover in my first blog post, I kept coming back to topics related to spread trading. As a former full-time trader who made a living formulating and executing spread strategies, and as the person who leads the product management function for proprietary trading at TT, which includes automated trading, I think a lot about themes related to spreading.
Private equity leads the way in tax efficiency
Anne-Sylvaine Chassany, Jim Pickard and Andrew Bounds – FT.com
Some UK lawmakers and union representatives have called for restrictions on tax advantages related to high levels of debt after research by the Financial Times showed the measures have helped some of the country’s best-known brands owned by private equity groups to reduce their corporation levies.
Stan Druckenmiller Gave A Startlingly Blunt Reason For Why Hedge Fund Managers Don’t Like Bernanke
It’s no secret that a lot of hedge fund managers on Wall Street have no love for Ben Bernanke or his monetary policy. Journalists, economists and pundits have mused on the reason why more times that anyone can count.
Investors Don’t Want to Destroy Themselves With Derivatives, After All
New York Magazine
Hey, psst. Wanna buy a synthetic CDO? Earlier this month, we got the news that a couple of Wall Street banks were trying to drum up interest in a synthetic collateralized debt obligation, or CDO, the kind of so-called “weapon of mass destruction” that most people blame for exacerbating the financial crisis.
Cargill to acquire Northstar Grain LLC assets
Cargill said it has reached an agreement to acquire the grain storage and crop inputs assets of Northstar Grain LLC and associated properties in Decatur in southwest Michigan.
[Video] Is Silver Lost in the Gold Market Spiral?
In today’s “Futures In Focus,” Suki Coper, precious metals analyst at Barclays, examines the silver market and the impact of gold’s price drop on the metals markets. She speaks on Bloomberg Television’s “Market Makers.”
Xetra/FWB: Subscription Start For KARLIE Group GMBH Bond
Banks & Brokers
FDIC’s Complex-Firms Chief Exits as Banks Write New Wills
Jim Wigand, who oversees the Federal Deposit Insurance Corp.’s Dodd-Frank Act powers to dismantle the most complex U.S. banks in a crisis, is stepping down next month.
Scottrade ranks highest in J.D. Power’s 2013 U.S. Self-Directed Investor Satisfaction Study
Business Wire via Yahoo! Finance
Online investing services company Scottrade, Inc. ranks highest in overall satisfaction in J.D. Power’s 2013 U.S. Self-Directed Investor Satisfaction Study released today, bucking the downward trend of the industry.
British private bank goes the extra furlong for clients
Reuters via Yahoo! News
By Laura Noonan LONDON – When Royal Ascot gets under way on Tuesday, the race meeting’s official bank will be continuing a tradition almost as old as the event that remains one of the highlights of the British aristocracy’s Social Season.
Osborne Says Mansion House Speech Will Detail RBS, Lloyds Plans
Chancellor of the Exchequer George Osborne said he will use his Mansion House speech tomorrow to set out plans for the return of Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc to the private sector.
Commerzbank Nears Deal on 5,000 Job Cuts
ULRIKE DAUER – WSJ.com
Germany’s Commerzbank AG and the bank’s labor representatives have agreed in principle on cutting more than 5,000 full-time jobs group-wide, a person familiar with the matter said Tuesday.
Universal banks start to feel the strain
William Wright – Financial News
When is a universal bank not a universal bank? When it’s actually called Universal Bank. This is a small community bank in California, which is about as far away as it is possible to imagine from the sort of global financial titan that its name suggests.
US buyside wary of high and low-touch convergence
Anish Puaar – Financial News
The US buyside broadly favours the sellside’s increasingly holistic approach to serving their equity trading needs, but is concerned that the move to combine high and low-touch trading may compromise the service they receive.
Axa will lend E10bn for infrastructure projects
Alistair Gray in London – FT.com
Axa plans to lend E10bn to infrastructure projects over the next five years, in a clear sign that insurance companies are rushing to fill the funding gap created by reluctant banks.
Clearing & Settlement
Omgeo names Jeannie Shanahan as MD of governance, risk management and compliance
In this role, Shanahan will focus on developing and implementing risk-based compliance programmes that support Omgeo’s ongoing commitment to providing services that reduce operational and counterparty risk and promote regulatory compliance.
Markit Acquires Corporate Actions Validation Service from DTCC
Markit, a leading, global financial information services company, today announced that it has acquired the assets of Global Corporate Actions Validation Service (GCA Validation Service), a leading provider of high quality, validated corporate actions data, from the Depository Trust & Clearing Corporation (DTCC).
CME Group Clearing Advisory: June 2013 Final Foreign Currency Settlement Prices
Indexes & Products
SEC’s Definition of an Index Is Outdated
What is an index? It?s hard to say these days. An index used to be a broad measure of market value. Today, it appears to mean any list of securities that are configured and managed in any way. This makes indexing confusing.
Exchanges Sector Heads Into Half Year In Positive Territory
With six months steady growth, the FTSE Mondo Visione Exchanges Index is tracking to the half year in positive territory – the longest period of consistent growth the Index has experienced for some years.
Moscow Exchange Indices Weekly Review: June 10-14, 2013
Abacus Group Launches FlexDrive
Abacus Group LLC, a leading provider of hosted IT solutions for hedge funds and private equity funds, today unveiled FlexDrive, a file-hosting service that allows hedge funds and private equity firms to securely share and transfer files with other users and other devices.
Enyx Enables Custom Connect To Deliver The Latest Shared Ultra Low Latency Microwave Service With Its FBM Solution
Prosecutors probe market manipulation on Frankfurt Exchange
German prosecutors said on Monday they were investigating possible market manipulation of some individual shares on the Frankfurt Stock Exchange by liquidity providers artificially inflating order volumes for small and midcap companies.
Hedge fund manager used postal box to hide $6 million fraud, Feds say
Tom Polansek and Ann Saphir – Reuters
A North Carolina hedge fund manager used a personal post-office box and forged bank statements to hide his theft of about $6 million over a seven-year period, U.S. regulators and prosecutors said on Monday.
Albany May Tighten Rein on Banking Consultants
JESSICA SILVER-GREENBERG and BEN PROTESS – NYTimes.com
New York State’s top financial regulator is preparing to crack down on the consulting firms that banks hire to navigate legal problems like money laundering and wrongful foreclosures, according to people briefed on the plans.
SEC Charges Two Executives in Ponzi Scheme At Dallas-Based Medical Insurance Company
The Securities and Exchange Commission today charged two executives at a Dallas-based medical insurance company with operating a $10 million Ponzi scheme that victimized at least 80 investors.
Former mortgage broker pleads guilty to submitting false documents to lenders
Environmental & Energy
China announces new measures to curb air pollution
China’s Cabinet has announced measures to curb the country’s notorious air pollution, one of the many environmental challenges facing the country that are increasingly angering the public.
China Smog Measures Seen as Most Aggressive Yet by Deutsche Bank
A Chinese government plan to fight air pollution announced last week marks the country’s “most aggressive” push to address smog to date, according to Deutsche Bank AG.
China Emission Trading Experiment Unlikely to Ease Cities’ Smog
China’s plan to set up markets to trade emissions will make it second only to Europe in efforts to put a price on pumping carbon into the atmosphere. For cities choking on the nation’s smog, expect little relief.
JPX Derivatives Trading Volume Passes 200 Million Mark
JPX is proud to announce that today the combined year-to-date trading volume of derivatives products on Osaka Securities Exchange Co., Ltd. (OSE) and Tokyo Stock Exchange, Inc. (TSE) reached 202,335,793 contracts (preliminary figure).
Japan Exchange Group To Re-Launch Super-Long-Term JGB Futures
Japan Exchange Group, Inc. (JPX) announced it has decided to re-launch Super-Long-Term (20-year) JGB futures (SL-JGB futures) based on JGB market conditions and discussions with investors. The re-launch is scheduled for April 2014, following the integration of the derivatives markets.
Stock Exchange of Thailand (SET) Strengthens Its Market Position
The Stock Exchange of Thailand (SET) is strengthening its market position in Asia, having recently passed the Singaporean Exchange with about a 35% higher trading volume. This is an impressive pole-position regarding volumes, and the bourse is now aiming to do the same for market capitalization as well.
Eurex Welcomes UOB Bullion And Futures As First Member To Connect To Its Enhanced Asia Network
Full Connection To Eurex’s Enhanced Network Is Now Available Via New Access Points In Hong Kong And Singapore
China Foreign-Investment Gains Ease as Economic Slowdown Deepens
Foreign direct investment in China rose in May by the least in four months, a sign of concern that growth is slowing in the world’s second-biggest economy.
Chinese Banks Pressure PBOC to Ease Cash Crunch
LINGLING WEI – WSJ.com
BEIJING—China’s big banks are pressuring the central bank to free up funds to ease an unusual cash squeeze in the world’s No. 2 economy, according to people familiar with the matter, illustrating a stark choice facing Beijing as it grapples with weaknesses in its financial system: add money to its system to help its lenders, or stay the course to rein in a rapid expansion of credit.
Press Conference By Taro Aso, Japan’s Deputy Prime Minister, Minister Of Finance, And Minister Of State For Financial Services
Hong Kong’s Securities And Futures Commission Bans Michelle Ng Man Chow For Life
Shenzhen Stock Exchange Market Bulletin
HKFE Announces Revised Margins For Aluminum Corporation Of China Futures
UAE revives bourse merger proposal
The United Arab Emirates has revived a proposal to merge its two main stock exchanges in a state-backed deal that could boost trade in the local market and attract more foreign investment to the Gulf state, sources familiar with the plan said.
Will Sebi ever fine Indian exchanges?
In India, stock exchanges have received censures from Securities and Exchange Board of India, or Sebi, (hardly ever publicly); but they have never been fined. Regulators are generally reluctant to impose financial penalties on stock exchanges, because of an underlying belief that this will shake investor confidence.
Greece, the Newest Emerging Market, May Be a Hot One
But there is one potential bright spot for the markets of the developing world: Greece. Yes, Greece.
SGX And CII Forum Highlights Infrastructure Investment Opportunities In India
Nigerian Stock Exchange Reviews Composition Of Market Indices